Sensex nosedives

Sentiment across the Dalal Street deteriorated further in afternoon trade, especially after the European markets fell further in opening trade. Weak manufacturing data in major regions like US, Europe and China pulled the markets lower.

Arjuna Mahendran, managing director, head of investment strategy Asia, HSBC Private Bank finds that even though the US debt ceiling issue is put behind for now, nothing has been cleared. In fact, problems plaguing the US economy and Europe still exist. "Going into the second half of the year, this week growth will keep markets lackluster," he says.

The slowdown in US economic data will remain a concern for India and other emerging markets. On the India story, Mahendran says that the sluggishness could go on till Diwali.

The 30-share BSE Sensex shed 247 points to 18,066 and the 50-share NSE Niftyplunged 75 points to 5,442. Market breadth too was worsened; about four shares declining for every one share advancing on National Stock Exchange.