Indian stocks opened with deep cuts Thursday on the back of continued weakness in global markets. At 0930 hours, the Sensex traded 136 points lower at 15,744 while the broader Nifty index declined 45 points to 4,718.
Global markets were all down as the optimism from the European summit fizzled out. Italy had to pay higher rates for its bonds Wednesday, making it more expensive to borrow.
Markets in South Korea and Hong Kong fell nearly 2 per cent while the Nikkei benchmark in Japan traded with over 1 per cent cuts. Overnight, the Dow ended 131 points, or 1.1 per cent, lower, closing below the 12,000 mark for the second straight day.
A falling rupee weighed on domestic sentiments. "The small caps and midcaps have been making new lows but Sensex and Nifty are still trading flat suggesting inter-market divergence. Hence, the possibility of the markets breaking down is low. However, rupee is a concern and may dictate the future course," Independent analyst Sarvendra Srivastava said.
Bharti was the top loser, falling over 2.5 per cent. Telecom regulator TRAI has said it will take legal action against Bharti for violating the mobile number portability (MNP) guidelines. Reliance Communication and Reliance Infra shed nearly 2.5 per cent today.
All groups of stocks traded lower but metal, capital goods and consumer durables stocks traded with deep cuts. Metal stocks declined tracking weakness in global commodities. Hindalco, Sterlite and Tata Steel - all traded lower.
Only 3 stocks traded higher on the Sensex, HDFC, HUL and HDFC Bank traded with small gains. The market breadth was extremely weak and only 10 per cent stocks managed to move higher on the BSE 500 index.