Sensex drops 183 points on global cues, Tokyo markets hit 28-year low

MUMBAI: The Sensex opened in the negative territory as sentiment turned bearish in global markets following poor US jobs data and concerns of a slowdown in China. All sectoral indices were in the red with capital goods, metals, banks and technology stocks leading the declines.
At 09:40 a.m., the Sensex was at 15,781.63, down 183.53 points, or 1.15 percent.It has touched a high of 15,831.54 and a low of 15,766.21 in trade today, ET reported.
The Nifty was at 4,778.15, down 63.45 points, or 1.31 percent. The 50-share index has touched a high of 4,797.85 and a low of 4,777.10 today.
The Sensex fell 1.3 percent, hitting its lowest since January 9, according to a Reuters report. The BSE index is close to erasing its gains for the year, currently at 15,761.48 points versus its 15,454.92 close at the end of 2011. Blue-chip stocks led the declines, tracking a more than 2 percent fall in the MSCI Asia-Pacific ex-Japan index, the report added.
"The Wall Street selloff came on account of the release of a report from the Labor department showing much weaker than expected job growth in the month of May. A weaker than expected manufacturing report from China proved to be a precursor to several similar manufacturing reports from countries across Europe. However, the disappointing US employment report appears to have had the largest impact on investors," according to an Angel Broking note.
"Momentum is still weak on hourly charts and is fading away on daily charts. Also, there are no signs of a reversal/slowdown in price action yet. Hence, the current weak tone could extend and push the index further lower towards the recent low of 4,789 and even the chart-gap (10 January) support at 4,749 in the coming 2-3 sessions.
On the higher side, stiff resistance is likely to be seen in the region of 4,867/4,889 (13-hour EMA) on any intraday rallies. Only a move above 4,949 will stall the prevailing weak tone and invite a notable recovery in prices," an Aditya Birla Money report stated.
The BSE Midcap Index was down 1.24 percent and the BSE Smallcap Index was 0.72 percent lower.
Among sectoral indices, the BSE Metal Index was down 1.77 percent, the BSE IT Index was 1.46 percent lower, the BSE Capital Goods Index was down 1.46 percent and the BSE Bankex fell 1.43 percent.
Cairn India (3.82 percent), Jindal Steel (2.70 percent), State Bank of India (2.57 percent), DLF (2.52 percent) and Hindalco Industries (2.49 percent) are among the Nifty losers.
Hero MotoCorp (0.62 percent) and BPCL (0.49 percent) are the only index gainers.
The market breadth was negative on the NSE with 290 gainers against 1,033 losers.
Oil prices were under pressure following concerns of slowing global demand. Brent crude oil fell more than $1 to $97.36 per barrel against its previous close.
Meanwhile, the rupee strengthened against the US dollar after a weak start. The partially convertible rupee was at 55.48 per dollar, up 6 paise against its previous close of 55.54.
Foreign institutional investors sold equities worth Rs 220.38 crore on Friday, according to provisional stock exchange data.
Tokyo markets hits 28-year low
TOKYO: Asian shares tumbled on Monday, pushing the broader Tokyo market to a 28-year low, as investors extended a rout of global stocks and worried about a nightmare scenario of euro-zone breakup, US economic relapse and a sharp slowdown in China, Reuters reported.
Tokyo's broader Topix index lost 2.1 percent to 693.35, a level not seen since late 1983, as Asian markets plumbed new lows for 2012. Japan's Nikkei average fell 2 percent after last week marking its ninth straight week of losses, the longest such losing streak run in 20 years.
Investors continued to head for the relative safety of bonds after weak U.S. jobs data on Friday sparked a global stampede out of equities and hit the euro and some risky currencies hard.
The MSCI's broadest index of Asia-Pacific shares outside Japan plunged 2.2 percent to their lowest since December. And US stock futures pointed to yet more selling when investors wake up in North America on Monday, with S&P 500 futures down 0.8 percent in Asian trade.
The euro and the Australian dollar, which is closely linked to risk appetite, staged only meek recoveries from their battering on Friday when the Australian currency hit eight-month lows. The yen, perceived as a safer currency in times of crisis, retreated from its highs against the dollar.
Overall, though, investors hedged against global financial and economic crisis, heading for havens such as the benchmark 10-year Japanese government bond whose yield fell below 0.80 percent to its lowest since July 2003. Ten-year JGB futures prices jumped to a 19-month high.
US and German government bond yields had both hit record lows on Friday.
Analysts said the flight to bonds was expected to continue until clarity emerged on issues such as the outcome of Greek elections due on June 17 and the recapitalisation of European banks, now in the shadow of a Spanish banking crisis.
"It's not an issue of risk-on or risk-off anymore, it's nervousness all over until a clear direction emerges on a long-term trend," said Hisamitsu Hara, chief FX manager at Bank of Tokyo-Mitsubishi UFJ.
"Currencies are locked in ranges with high volatility, with both the euro and the dollar facing limited upside due to their problems, while the yen's upside is also capped by wariness about intervention," he said.
US job growth braked sharply for a third straight month in May and the jobless rate rose for the first time in nearly a year, with 69,000 jobs added to payrolls last month, the least since May last year. As well, 49,000 fewer jobs were created in the previous two months than had been thought.
"We may even see more talk of the need for additional quantitative easing," Standard Chartered Bank said in a research note, adding that the data had given ammunition to doves ahead of the US Federal Reserve's policy meeting on June 19-20.
The median of forecasts from 15 primary dealers - those institutions that do business directly with the Fed - showed a 50 percent chance the central bank would eventually launch another round of quantitative easing, up from 33 percent on May 4, according to Reuters polling.
The weak US data followed poor Chinese manufacturing data and dismal European reports on factory activity. Markets had already been on edge over the deepening euro-zone crisis.
Spot gold was down 0.5 percent at $1,616.99 an ounce on Monday after posting its biggest one-day rally in more than three years on Friday.
The yen stood at 78.18 yen against the US dollar on Monday, off a 3-1/2 month high of 77.65 yen hit on Friday. It stood at 96.99 against the euro, after climbing to its highest since December 2000 of around 95.59 yen on Friday.
The euro was at $1.2410 on Monday, recovering from Friday's low of $1.2288.
"The evolving global slowdown amidst global sovereign financing dilemmas has pushed the yen back into 'super yen' territory, signalling extreme pressures," said Richard Hastings, macro and consumer strategist at Global Hunter Securities, adding that he saw little relief in the euro/yen pair.
"If the European situation worsens, then the global interest rate and policy solutions would require coordinated actions by the Bank of Japan and the Federal Reserve to assure access to US dollar money markets, otherwise risk a contraction in global trade," he said.
Analysts are closely watching several monetary policy meetings due this week, including the European Central Bank on Wednesday and Bank of England on Thursday, for clues on their responses to vulnerable global growth.
US crude futures fell 1 percent to $82.35 a barrel on Monday, after hitting its lowest level in almost eight months on Friday. Brent eased 0.6 percent to $97.83.
(Inputs from Reuters)