MUMBAI: Equities opened sharply lower on Tuesday pressured by weakness across the globe as the crisis in the US mortgage market soured sentiment. Apart from global cues, investors back home also worried about inflation, slowing industrial production and instability on the political front. ( Watch )

At 10:05 am, the Bombay Stock Exchange’s Sensex was down 322 points or 2.42 per cent at 13,008.12.

Biggest Sensex losers were Jaiprakash Associates (-4.52%), Reliance Infrastructure (-4.4%), Mahindra & Mahindra (-3.93%), Maruti Suzuki (-3.33%), HDFC Bank (-3.17%) and DLF (3.02%).

There were no gainers in the 30-share index. Market breadth was extremely weak; on BSE, 637 declining shares outnumbered 174 advancing ones.

The National Stock Exchange’s Nifty was down 95 points or 2.35 per cent at 3944.90.

The Nifty has support at 3896 according to Anagram Stock Broking. In a note to its clients, the brokerage said, “The manner, in which Mr Karat is going about looking for every single vote to pull down the Government, should make the market revise expectations of the outcome of the trust vote. It now seems that the trust vote is not going to be a cake walk, as expected. Today will be the third day of the fall of the IT stocks. Some semblance of buying could emerge in the battered sector.”

“The failure of IndyMac and the rescuing of Fannie Mae and Freddie Mac have weakened banking stocks all over the world. Our own Axis bank, put up a brilliant performance, better than the wildest of expectations, and yet finished lower for the day,” the brokerage added.

Even though Indian banks have little exposure to the US housing sector, sentiment in the sector across the globe is at an all-time low, and India is no exception. The likely hood of another interest rate hike in light of the inflation situation only makes matters worse for banks.

The BSE Bankex was down 3.43 per cent, with ICICI Bank, HDFC Bank and State Bank of India down about 4 per cent each.

Asian markets fell for a second day as the worsening situation of credit markets took a toll on financial shares. The Nikkei 225 tumbled 2.06 per cent, Hang Seng plunged 3.44 per cent and Straits Times lost 1.92 per cent.

US stocks declined Monday and the financial sector pummelled as uncertainty reigns in the wake of the failure of IndyMac Bancorp and the government rescue of mortgage-finance giants Fannie Mae and Freddie Mac. The Dow Jones Industrial Average fell 0.41 per cent, the Standard & Poor's 500 Index lost 0.9 per cent and the Nasdaq Composite Index slipped 1.17 per cent.

Meanwhile, crude oil was steady below $145 on Tuesday, as investors weighed the impact of high oil prices on global demand against fresh threats of supply disruptions in Nigeria, Brazil and Iran.

http://economictimes.indiatimes.com/