St boards a train bound south - Daily News & Analysis

Renewed fears about the euro debt crisis, coupled with a disappointing railway budget, prompted broad-based selling by investors on Tuesday, dragging the markets down lower ahead of the General Budget. The Sensex shed 1.64%, or 316.55 points, to close at 19015.14. With this, the index has lost 1,000 points over the past month. The Nifty, too, lost 93.40 points to close well below the 5800 mark, at 5761.35. The fall was in line with global markets after the outcome of the Italian election pointed to a hung parliament. With no single party having a clear majority, there were heightened fears that austerity measures initiated by the previous government might be reversed. Following the US markets, which had closed 1.5-2% lower overnight, Asian markets too fell 1-2.25% and European stocks were trading 1-2% down. Piyush Garg, CIO of ICICI Securities, said the correction was partly expected, given that global markets had seen a good rally over the last few months and domestically, there were no major triggers – with budget expectations largely factored in by now. The market breadth was extremely negative with seven out of 10 stocks on BSE ending in red. Midcaps and small caps took a beating for the second consecutive day, shedding 1.76% and 2.43%, respectively. As many as 50 BSE stocks lost more than 10% during the day. Going ahead, market participants see the weakness continuing in the near term. Shardul Kulkarni, senior technical analyst at Angel Broking, believes that with the 5820 support taken out, the Nifty will see a further correction of 150-200 points. "Barring IT, There is nothing in the price or index stocks to suggest the markets may be headed higher." Garg, however, believes the markets may not see much downside below 5700, unless there is some major negative global trigger. @nitinpshri via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNF1zLVhRO9ZI3AGDHkQLTRFVKrhsw&url=http://www.dnaindia.com/money/report_st-boards-a-train-bound-south_1805078

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