Global cues drag markets

The markets opened in the red in line with the Asian markets due to the global sell off triggered by the US markets.As suggested by the SGX Nifty, the CNX Nifty started down 62 points at 5,529 and the Sensex lost 202 points to start at 18,404.However, the broader markets have started better with the smallcap index down 0.6% outperforming the Sensex which shed 1% while the midcap index lost 0.9% in the opening trades.

Among the sectoral indices, only FMCG index which gained nearly 0.3% is the only index which started in the positive. Meanwhile, rate sensitives, Realty and Bankex, down 1.5% each are leading the losses. The movers in the FMCG space are Hindustan Unilever up 1%, Dabur India and ITC gaining 0.5% and 0.2% respectively.

In the US markets, the Standard & Poor's 500 index, like other major Wall Street indices, fell more than 2%, its biggest drop since August 11. Growth in the U.S. manufacturing sector slowed sharply in May, with the Institute for Supply Management's index of national factory activity falling to its lowest level since September 2009. The sudden spill in U.S. stocks sent investors scurrying to the liquidity of the U.S. government bond market and sent the benchmark 10-year yield below 3 percent.

Taking cues from developments overnight, the Asian markets too started in the negative. The top losers among the indices aare Hang Seng and Nikkei losing 1.5% each.Political uncertainty also loomed over Tokyo, with a former prime minister joining the swelling ranks of ruling party rebels trying to oust Prime Minister Naoto Kan, raising the risk that a no-confidence vote will pass in parliament on Thursday forcing him to quit.
Among individual stocks, Cipla is the top gainer in the opening trades, gaining nearly 2% followed by Hero Honda, Bharti Airtel and ONGC gaining between 0.4-1%

The losers among the Sensex-30 stocks in the starting trades are ICICI Bank, Tata Motors and DLF down 2% each followed by Maruti Suzuki, Mahindra & Mahindra, Jaiprakash Associates, Tata Steel and L&T which lost 1% each.

The market breadth is negative.Of the total 1720 stocks traded on the BSE, 1101 stocks declined while 556 advanced.