The stock markets continued their downward spiral at the opening session on Monday as global cues remained negative. Reports of the sudden demise of North Korean leader Kim Jong-il sparked sell-off across the region.
Besides, a comment by Mr Christopher Wood of CLSA, that “a violent selloff down to the 11,000-12,000 levels on the Sensex, combined with a further depreciation in the rupee to the Rs 60/$ level, now appears quite possible,” also affected the sentiment.
However, recovery in the European stock market helped Indian benchmarks to shave off most of the losses but still ended at 28-month lows. For the fourth straight session, Indian indices closed in the red. The BSE Sensex which dropped 15,190.74 during the day recovered to 15,379.34, a fall of 0.72 per cent from Friday. The NSE's S&P CNX Nifty declined 38.50 points to 4,613.10.
FIIs continued their selling spree. They sold shares worth Rs 450.37 crore on Monday, according to stock exchange data. Domestic institutions were buyers to the tune of Rs 18.6 crore. The rupee ended at 52.88/90 to the dollar from Friday's close of 52.70/72, after touching a low of 53.25 during the day.
Recovery was seen in the broader markets with pivotals such as Reliance industries, TCS and Tata Motors gaining ground. However, the advances to decline ratio was disappointing with 36 declines out of the Nifty-Fifty stocks. The rate sensitive shares such as banking and real estate stocks fell with Axis Bank, Punjab National Bank, DLF and SBI being top losers, falling in range of 3-6 per cent.
“Overall, markets continue to remain in the downtrend making new lows and lower highs,” said Mr Milan Bavishi, Head Research-Inventure Growth and Securities.