(RTTNews) - Friday, the Indian market is likely to test its multi-year lows, though some buying may emerge later in the day, as the key indexes breach their next support levels. Investor sentiment may remain fragile on concerns about the broad outlook for the global economy. Stocks across the sectors are likely to come under selling pressure.

Relentless selling by foreign funds combined with a lack of adequate support from domestic mutual funds and insurance companies has been weighing on the market for the past few sessions.

Investors are worried about the future of the market, as they fear the global economy is slipping into a recession. Panic-stricken investors are dumping their stocks, while those who have resources to buy are waiting for some kind of stability to emerge before resuming buying.

The Chinese market has outperformed the rest of the Asia markets over the last few sessions after its government announced a $586 billion stimulus package to boost demand in the economy. Investors in India are also anticipating such kind of fiscal stimulus from the government apart from another round of rate cuts from the RBI.

Overnight, the U.S. markets plunged following a late-day sell off. Stocks fell in early trade following the release of a report from the Labor Department that showed that first-time claims for unemployment benefits unexpectedly jumped to a sixteen-year high last week. However, selling pressure waned not long after the open and the markets moved back to the upside as traders went bargain hunting on reports that a group of senators had reached a compromise on a bailout of the three big U.S. automakers. The Nasdaq Composite index tumbled 5.07%, the Dow Jones Industrial Average plummeted 5.56%, and the S&P 500 index plunged 6.71%.

The Indian ADRs also fell sharply across the board. ICICI Bank (down 9.72%), HDFC Bank (down 9.66%), Wipro (down 8.19%) and Satyam Computers (down 5.81%) were some of the prominent losers.

Currently, markets across the Asia-Pacific region are trading lower for a fifth day after stocks on Wall Street nose-dived overnight on economic worries. Hong Kong’s Hang Seng index is down 2.88%, China’s Shanghai Composite index is declining 4.05% and Japan’s Nikkei 225 index is losing 2.22%.

On Thursday, on the final day of trading for the December contract, crude oil plunged to its lowest settle price since May 23, weighed down by weak demand for energy after dismal U.S. economic data intensified concerns of a long and deep global recession.

After finishing at $49.62 a barrel, down $4 in New York trading on Thursday, crude oil January futures are currently trading at $48.60 a barrel, down 1.66%.

Meanwhile, the rupee tumbled to a record low on Thursday, as investors feared that the exit of foreign funds would exert more pressure on the currency. After plunging to the day’s low Rs.50.60, the rupee ended at Rs.49.99/50.00 against the dollar, helped by central bank intervention.

The Indian market fell sharply in-line with the rest of the global markets on Thursday, as fears of a prolonged global recession daunted investors. Traders dumped stocks, tracking the extreme weak global cues after the U.S. Federal Reserve slashed its growth forecasts for the American economy for the next three years.

The BSE Sensex finished at 8,451, down 323 points or 3.68% and the S&P CNX Nifty ended at 2,553, down 82 points or 3.11%. Stocks across the sectors ended in negative territory. Realty, consumer durables, oil/gas, banking, metal and auto stocks ended deep in the red. On the BSE, the market breadth was extremely negative, with 1899 decliners compared to 594 stocks that gained.

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Posted in Categories: Japan, Releases, Stocks, USA.

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