Nifty ends below 6000, Sensex slides 406 pts; banks bleed

Moneycontrol Bureau
Live Market Commentary

33:50 pm Market closing: The Sensex ended down 406.08 points or 1.97 percent at 20229. The Nifty closed at 5999.05, down 123.85 points or 2.02 percent. About 923 shares have advanced, 1536 shares declined, and 133 shares are unchanged.

Sesa Sterlite and HDFC ended 4 percent down while L&T, BHEL and NTPC closed with loss of 3 percent each.

Equity markets across Asia and Europe slide in trade after the US Federal Reserve hints at scaling down its USD 85 billion monthly bond buying programme earlier than expected. FOMC believes that a taper will not lead to high interest rates.

Taper fears force investors to bet on the dollar, as the Indian rupee sees sharp cuts in trade.

3:40 pm Macro outlook: India's narrowing current account deficit will not be enough to shield the country from pressures tied to Fed tapering, says Fitch Ratings.

However, Fitch adds the spillover effects of the Indian rupee's weakness have not significantly hurt India's creditworthiness and will therefore not trigger any ratings action at this point.

"(India's ratings) already incorporate both the sovereign's vulnerabilities and tolerance for volatility in global financial market conditions," Fitch said.

3:30 pm Opinion: In an interview to CNBC-TV18, Rob Aspin, Standard Chartered Bank says he believes equities will generate positive returns next year. However, that does not mean he is bullish on equities compared to other asset classes.

“The US dollar will strengthen going into 2014 and that will be partially negative for the emerging markets. But also with tapering that will impact the liquidity in the emerging markets which will be negative as well,” he explains. As a result, despite expecting reasonable returns from Indian market over the next 12-month period, he remains "underweight" on the country.  

Don't miss: Positive on Dabur, Marico, Bata and Emami, says CIMB 

The market is getting slaughtered as bears took charge of Dalal Street on nervous investor sentiment. The Nifty slides 126.30 points or 2.06 percent at 5996.60. 

The Sensex is down 410.66 points or 1.99 percent at 20224.47, and About 835 shares have advanced, 1487 shares declined, and 151 shares are unchanged. The Nifty and the Sensex mark the biggest obe-day loss since September 3. The Nifty put call ratio slips to 0.85. All 50 Nifty and 30 Sensex stocks trading in the red.

All global markets are under pressure as Fed minutes hint of taper in the next few months.

However, World Bank Chief Jim Young Kim says India is expected to have a good third quarter which is in line with P Chidambaram's observations that the country’s economy is picking up.