Mkt breadth extremely disappointing, Nifty below 4800

CNBC-TV18s Executive Editor, Udayan Mukherjee - What a terrible day it has panned out to be. Who would have thought sitting earlier in the day that the Nifty would break 4,800 so convincingly. But that is what it seems to be on course for doing. It is at 4,765 and early morning we were trading at 4,910. So, it is almost 150-point cut on the Nifty from the highs of the day. That is extremely disturbing and a bit unexpected one would have thought too, the way trade opened up globally and locally today.

Europe is not a pretty picture and across the board there is a lot of selling in the European markets. Most of them are holding 1.5-2% cuts. That is perhaps why our markets are tumbling. But even early afternoon before the European market opened, the signs were not good. It has been a steady incline and lots of sectors have participated. Of course volumes have been really low today and one of the lowest that we have seen. We are probably on course to end up with about Rs 45,000 crore, which would be really low. But so far as we speak, only Rs 33,000 crore of trade with one hour left.

The breadth has also been extremely disappointing. The number of declining stocks now edging towards 1,000 and the number of advances only 250. So, this has been a complete crisscrossing of the red and the green line in the late afternoon session. As we speak, it is 300 points down on the Sensex, at 16,100. The Nifty is getting further away from the 4,800 mark, which was an important support level for a lot of technical analysts and traders.

What has caused the fall? A lot of sectors - commodities - metal stocks have been pounded today with the likes of Nalco, Hindalco coming off quite sharply. We have seen a lot of pressure on the whole power and infrastructure space, so whether it is NTPC or Reliance Infrastructure, Suzlon, BHEL, Power Gird - that entire set of stocks has ground down quite a bit. Technology was helping the market but today is has not with leading stocks like TCS coming off sharply. Heavyweights like ONGC and Reliance have also sold off and cement has not been a pretty picture.

On the way up only a handful of auto and pharmaceutical stocks have held out. But clearly, they have not been enough to support the market. On midcaps, momentum stocks have seen quite a bit of OI reduction, so positions are getting cut out there. Punj Lloyd has had it really weak throughout the day. Some of the private banking and financial names are coming under a lot of pressure in today's session. So whichever way one looks at it, it is not been a good session at all for the market and the Nifty futures is now trading at a fairly significant discount as well perhaps indicating what traders are doing. It is no surprise that shorts are piling up as we speak - 25 point discount now on the June futures - that’s the highest we have seen in the last few days. Remember, on the last day when it rolled over the futures series, the Nifty futures June was at a 25-point premium and today at a 23-point discount.