European debt fears dragged down the stock market indices on Friday, a day bears ruled the roost around the world. In the domestic market the Bombay Stock Exchange benchmark 50-share index, Sensex, lost 434.02 points.

The Sensex closed at 15790.93 after a volatile trade, which witnessed a swing of 500 points. It opened two points lower, which was also the day’s high, but extended the losses and breached the crucial 16000-level to touch the day’s low of 15725, taking lead from the extremely weak global sentiment. A broader 50-share Nifty of the National Stock Exchange also breached the 4800-level to close at 4718.65, a loss of 126.70 points or 2.61 per cent.

All sectoral indices too ended in the negative territory with realty loosing 4.36 per cent followed by metal 4.26 per cent, oil and gas 3.41 per cent, PSU 3.52 per cent and bankex 3.04 per cent. FMCG lost 1.57 per cent.

While most of the Asian bourses closed 1-3 per cent lower, the European markets witnessed a ten-week low. Japan’s Nikkei lost 298.89 points or 2.89 per cent at 10057.09 and Hong Kong’s benchmark stock index Hang Seng lost 676.56 or 3.33 per cent at 19665.98.

Earlier in the day, U.S. stock futures opened lower, as investors remained cautious ahead of the key labour data. However, U.S. markets are expected to open flat as unemployment rate surprisingly dropped to a five-month low, according to a government report on Friday. While writing this report, Dow Jones index opened lower by 7.03 points at 9995.15.

Of the total 2,902 stocks traded on the BSE, 2,368 stocks declined, whereas only 487 advanced. Forty-seven stocks closed unchanged.

The BSE mid-cap lost 169.77 points or 2.60 per cent, small-ap lost 270.82 points or 3.25 per cent and BSE 500 lost 169.91 points or 2.62 per cent.

PTI reports:

European shares began on a jittery note, with London Stock Exchange’s benchmark FTSE 100 dropping over one per cent.

World stocks fell as investors were spooked by concerns over ballooning deficit of euro zone countries Greece and Portugal.

Higher than expected number of people seeking unemployment benefits in the U.S. and a crash in commodity and energy prices further dampened sentiment.

Domestic fears

Domestic factors such as high inflation and fears government stimulus being withdrawn also kept markets under severe pressure.

Realty shares were the worst hit among all counters as fear of a rate hike continued to loom large.

Metal stocks were battered as prices were hit in the London Stock Exchange following the U.S. dollar gaining strength. IT stocks declined for the second day in a row after an industry body Nasscom cut the sector’s export forecast for 2010-11.

Lower-than-expected response to NTPC’s follow-on public offer (FPO) also had a cascading effect on infrastructure stocks. Also, many expect a lower government spending on infrastructure. NTPC ended down by Rs. 3.25 or 1.57 per cent at Rs. 204.30 on the BSE.

From the Sensex pack, Hindalco at 5.51 per cent was the biggest loser, followed by Tata Steel (4.65 per cent). ONGC (4.54 per cent), Jaiprakash Associates (4.46 per cent), M&M (3.93 per cent) were the other big losers. Market leader RIL too lost 3.74 per cent, ICICI Bank 3.73 per cent and DLF by 3.67 per cent.

The market breadth continued to remain negative as 2,368 counters closed with losses while 487 ended with gains on the BSE.

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