Indices drop nearly 3% on global woes

The market opened sharply lower on Tuesday pressured by weakness in other Asian markets. Concerns over inflation and the likelihood of an interest rate hike back home, only worsened the situation. Shares of real estate, banks and power companies were the biggest losers.

At 10:05 am, the Bombay Stock Exchange’s Sensex was down 395 points or 2.92 per cent at 13,130.87.

Reliance Infrastructure (down 6.24%), Jaiprakash Associates (6.18%), State Bank of India (5.7%), Mahindra & Mahindra (5.31%) and Reliance Communications (5.17%) fronted the decline. There were no gainers in the 30-share index.

The National Stock Exchange’s Nifty was down 107 points or 2.65 per cent at 3923.10.

“Failing to cross the 4165 mark, the Nifty failed the litmus test. The fact that all the morning gains were shed by the close has made an inverted hammer on the daily charts, which is a harbinger of more gloom. There are three supports between 3848 and 3896, which may be put to test. A close below 3848 will trigger more shorts,” Anagram Stock Broking said in a note to clients.

US stocks headed toward a lower close Monday after a rally triggered by falling oil prices dissolved amid concerns about the health of the banking sector. The Dow Jones Industrial Average fell 0.5 per cent, the Standards & Poor’s 500 Index dropped 0.84 per cent and the Nasdaq Composite Index slid 0.09 per cent.

Asian shares were slammed Tuesday triggered by losses in the US overnight. The Nikkei 225 slipped 2.48 per cent, the Hang Seng declined 3.67 per cent and the Straits Times lost 1.98 per cent.

Oil edged higher Tuesday, around $142 a barrel, after retreating to around $141 a barrel on Monday on the New York Mercantile Exchange.