MARKETS CONTINUE TO BLEED

The November series F&O contract expiry week got off to a dispiriting beginning as the benchmark equity indices got bludgeoned by over two and half a percent in the session and extended the sorrow of closing in the negative terrain for the eighth straight session. The frontline indices' southbound journey only halted with the close of the trading session and the key gauges even slipped below the psychological 16,000 (Sensex) and 4,800 (Nifty) levels as market participants continued to remain concerned about the prospects of risky asset classes like equities amid signs of slowing domestic economic growth and sluggish policy initiatives and debt crises in the US and Europe. Jitters over the uncontrollable sovereign debt from both sides of the Atlantic continued to arrest any potential upswing for bourses around the world. Sentiments were undermined by political bickering in Europe over the ways to avert the sovereign debt debacle and worries that the US is heading for economic crisis after Congressional leaders' talks on a sweeping deficit agreement were heading for failure. Local benchmarks were among the worst performers among major European and Asian markets. Asian markets snapped the session with deep cuts after Singapore warned of a slowdown next year because of slowing exports while Japanese trade data showed that world's third largest economy unexpectedly registered a trade deficit in October as the nation's exports declined for the first time in three months. Furthermore, the rupee breached the psychological 52 mark against the US dollar, an all time closing low for the local currency and continued to adversely impact the importers. The currency hit fresh 32-month lows against the dollar despite reports suggesting that the RBI has intervened in the currency markets to stall the slide in rupee. Meanwhile sentiments also took a hit after a CII survey showed that manufacturing sector growth moderated in the first half and is likely to slow down further in the ongoing quarter because of the rise in input costs and uncertainties in the global economy.
Earlier on Dalal Street, the benchmark got off to a sluggish opening since sentiments remained weak following the pessimism prevailing in Asian markets. Thereafter, the bourses treaded on a southbound journey and showed absolutely no signs of recovery through the session. The selling pressure aggravated from the mid noon trades as European markets collapsed to trade with large cuts of over two percent. The key gauges eventually shut shops with huge losses around the lowest levels of the day. The NSE's 50-share broadly followed index Nifty got slaughtered by over two and half a percent to settle below the crucial 4,800 support level while Bombay Stock Exchange's Sensitive Index, Sensex deposed over four hundred points and closed below the psychological 16,000 mark. Moreover, the broader markets continued to bear the brunt of hefty position squaring and suffered cuts of close to two percent but outperformed their larger peers. On the BSE sectoral space, the Metal index remained the top laggard in the space with about three and half a percent losses. The rate sensitive Bankex and Realty pockets too went home with cuts of over three percent. Though, there appeared no gainer in the sectoral space however, individual stocks like Maruti Suzuki and Sun Pharma went home with marginal gains. The markets declined on large volumes while the turnover for NSE F&O segment too remained on the higher side as it was the first day of F&O expiry week. The market breadth remained abysmal as there were 786 shares on the gaining side against 1974 shares on the losing side while 135 shares remained unchanged.
Finally, the BSE Sensex plummeted by 425.41 points or 2.60% to settle at 15,946.10, while the S&P CNX Nifty shaved off 127.45 points or 2.60% to close 4,778.35.
The BSE Sensex touched a high and a low of 16,297.03 and 15,900.30 respectively. The BSE Mid cap and Small cap index down by 1.86% and 1.68% respectively.
The major gainers on the Sensex were Maruti Suzuki up 0.20% and Sun Pharma up 0.14%. While, Tata Motors down 5.20%, BHEL down 5.04%, ICICI Bank down 4.90%, Sterlite Industries down 4.85% and DLF down 4.23% were the major losers on the index.
There is no gainer on the BSE sectoral space. While Metal down 3.46%, Bankex down 3.24%, Realty down 3.04%, Power down 2.72% and Auto down 2.68% were the major losers on the BSE sectoral space.
Meanwhile, growth in the manufacturing sector has moderated in the first half of current financial year compared to the corresponding period of the last financial year, and it is likely to slow down further in the ongoing quarter because of increase in input cost and uncertainties in the global economy.
'The manufacturing sector has observed moderation in growth during April-Sep 2011 compared to the corresponding period of the previous year. The industry expects further moderation in growth in the third quarter -- Oct-Dec 2011,' said a Confederation of Indian Industry (CII) Ascon survey.
The survey further stated that the number of sectors recording excellent and high growth is expected to decline and shift to moderate growth category. Out of 103 sectors covered by the survey, those reporting excellent growth of more than 20% declined to 10.6% in April-September 2011 compared to 35.7%  in April-September 2010.
During April-September 2011, 43.6% sectors recorded a moderate growth rate compared to 38.9% sectors in the previous period. The percentage of sectors with high growth rate has increased from 16.7% in April-September 2010 to 24.2% in the same quarter in 2011. The sectors registering a negative growth rate have increased significantly to 21.3% from a low of 8.7%, which is a clear sign of decelerating growth.
The CII survey also showed that further slowdown in growth with a larger number of sectors is declining in the moderate category of growth of 0-10%. Out of 85 sectors covered by the survey for the period Oct-Dec 2011, the percentage of sectors reporting excellent growth of more than 20% is expected to decline to 7% from 10.4% in July-September 2011 and 20.7% in April-June 2011.
As per the Index of Industrial Production (IIP), the manufacturing sector grew by just 5.4% in the first six months of 2011-12, compared to 8.8% in corresponding period of 2010-11. And in September 2011, it grew a modest 2.1% compared to 6.9% in September 2010. 
Chandrajit Banerjee, director general of CII said, 'high input and capital cost and uncertainties in the global economy are the major factors constraining growth of the manufacturing sector. These issues need to be addressed at the earliest to help industry overcome the ongoing decelerating growth phase.
While the categories like basic goods, intermediate goods, capital goods and consumer non-durables have fewer sectors in the excellent and high growth brackets, consumer durables have a larger share of sectors growing at a high rate. The worst performing category is intermediate goods that have a maximum number of sectors expected to record negative growth.
The S&P CNX Nifty touched a high and low of 4,873.80 and 4,764.80 respectively.
The top gainers on the Nifty were Maruti Suzuki up 0.79%, Coal India up 0.45%, Sun Pharma up 0.28% and HUL up 0.04%. On the flip side, SAIL down 6.57%, Sesa Goa down 5.99%, Cairn down 5.96%, DLF down 4.92% and Tata Motors down 4.76% were the top losers on the index.
The European markets were trading in deep red. France's CAC 40 down 2.43%, Britain's FTSE 100 down by 2.11%, and Germany's DAX down by 2.55%.

Carnage continued in the Asian region on fifth straight session as Europe's debt crisis continued to undermine sentiment, with banks and commodity plays leading the region's decline, while an unexpected trade deficit for Japan further hurt exporter shares in Tokyo. Moreover, uncertainty over debt crisis and an apparent failure by US politicians to agree on deficit reduction too hurt the sentiment. The US congressional deficit-reduction committee was set to formally announce its three-month-long effort to bridge partisan differences over taxation and spending has failed.

Investor confidence also dampened when China and Singapore painted a bleak picture of the global economy, with uncertainty over deficit-reduction negotiations in the US adding to the gloom. Markets also reacted to news Japan logged an unexpected trade deficit in October, while business hub Singapore predicted sharply lower economic growth next year and warned a weaker global economy could worsen the situation.