Sensex falls over 200 points

The BSE Sensex opened gap down Monday, falling 1% tracking weakness in global markets. The benchmark extended losses as selling pressure gathered momentum on the Dalal Street. The broader Nifty index traded below the key 4,800 mark.

The latest trigger for the global selloff came from the US, where American employers added just 69,000 jobs in May, the fewest in a year. Economists had forecast a gain of 158,000 jobs. Economic news from all major economic regions was depressing. The unemployment in the 17 countries that use the euro currency stayed at a record-high 11 percent in April. China's manufacturing sector weakened in May.

The Sensex has now fallen nearly 500 points in two trading sessions in June. The sharp fall comes on the back of over 5% cut in May.

"This market is headed towards 4,550-4,600 and the 52 week-low is likely to be tested," independent analyst Sarvendra Srivastava said.


All groups of stocks traded lower on the BSE. High beta realty stocks (-3%) led the losses, followed by consumer durables stocks (-2.7%). 

On the Nifty index, 48 of the 50 stocks traded in the red. Realty major DLF (-5.8%) was the top loser, followed by oil and gas major Cairn India (-4.6%). The Vedanta Group firm is hit when crude prices fall.

Commodity stocks like Hindalco (-3%) and JSPL (-2.9%) saw selling pressure on the back of global uncertainty. State Bank of India (-2.6%), which had seen significant gains on the back of Q4 earnings, led the losses in the banking sector. IT stocks also traded lower, led by Infosys (-1.72%).

Hero MotoCorp (0.7%), India's biggest two wheeler firm gained on the back of strong sales in May. Oil refiner BPCL (0.36%) rose after days of selloff.

The market breadth was extremely weak with only 9% stocks managing to advance on the BSE 500 index.

Asian markets also traded with deep cuts, with benchmarks in South Korea, Hong Kong and Japan falling 2-3% Monday. The Dow Jones index fell 275 points or 2.2% Friday.

"Global cues will decide the trend for markets... if ECB does not decide anything on Spain later this week, we could see lower levels," Avinnash Gorakssakar of Moneyinvestments.in said.

Tokyo market hits 28-year low on dismal US hiring report

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, U.S. economic relapse and a sharp slowdown in China.


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 U.S. 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.

U.S. 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.

U.S. 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 U.S. Federal Reserve's policy meeting on June 19-20.

'Butcher of Bihar', shot dead

Arrah, Bihar: There has been violence in several parts of Bihar after the murder of Brahmeshwar Singh or Mukhiya, who headed the banned, upper caste militia Ranvir Sena in the state. He was shot dead on Friday morning by unidentified people in the town of Arrah, which is now under curfew. The militia chief's supporters are not allowing the body to be moved,insisting that Chief Minister Nitish Kumar to visit first the murder site first. 

A violent backlash that began in this part of north-western Bihar has now spread to other parts of the state. Mr Mukhiya's angry supporters have vandalized public property, burnt buses and set offices on fire, smashed windows of the Patna Rajdhani Express and they even heckled and pushed Bihar's police chief DGP Abhay Anand, when he visited Arrah. Mr Anand looked visibly ruffled. He announced that a police team had been set up, headed by a senior cop, to investigate the murder and that it would camp at Arrah till it solved the case. "It is an unfortunate incident, one that can cause tension and we will try to defuse the tension by finding the assailants," the top cop said. 

The Chief Minister said the matter would be investigated as all such matters are."I appeal to people to maintain peace and to have patience. Proper investigation will be done and those responsible  will be punished," Nitish Kumar said.

In the 90's, the Ranvir Sena played a role in many of Bihar's infamous massacres which targeted 200 Dalits including women and children. The Sena or army was formed in 1992. Its victims were usually landless labourers and peasants. The Sena said it was committed to protecting the rights of farmers, and was avenging the murder of members of the upper caste, often land-owners, who were killed by the Naxals during their insurgency in Bihar in the 1980s and 90s.  

The Ranvir Sena's deadliest strike was in the Lakshmanpur Bathe area in 1997, in which 58 Dalits were killed. 

Brahmeshwar Mukhiya was arrested in 2002 from Patna for the murders of 21 Dalits in a village in Bhojpur in 1996. The Sena chief spent nine years in jail. He was released on bail in 2011. Since then, he lived in his village in Bhojpur, maintaining a low profile. In April this year, the Patna High Court ruled that the prosecution had not been able to prove its case against him and others accused of the massacre.

Maintaining law and order after his murder will be a critical test for the administration of chief minister Nitish Kumar. When he was elected in 2005, one of Mr Kumar's promises was that he would rid Bihar of its cycle of caste-based violence. Through a strong police force and administrative reforms, he has been largely successful so far.

Bumpy start to June

It's been a rough start for the June series as the Niftyshed 80 points to close below 4850 dragged down by rate sensitives, commodity, utilities and technology stocks. A slew of bad economic cues from across the globe didn't help Indian equities either. Reports of monsoon rains over India's mainland will be delayed by about four days also weighed on sentiment.

China's official purchasing managers' index fell to 50.4 in May from April's 13-month high of 53.3, and a separate HSBC PMI survey showed a seventh consecutive month of contraction in the manufacturing sector.

Back home, India's exports rose 3.23% year-on-year to $24.5 billion in April, while imports grew 3.83% to $37.9 billion, government data showed on Friday.

All eyes on oil firms; will petrol prices be cut?

Petrol prices may be revised on Friday with companies talking about a scope of cutting rates by Rs 1.50-1.60 a litre. BPCL CMD RK Singh said on Thursday that prices could be cut by Rs 1.5 to 2 a litre if there is a drop in international crude prices.

Indian Oil , Hindustan Petroleum and Bharat Petroleum had over the past one week indicated of a scope of reducing rates from June 1. The three firms, as per practice, were to revise rates of petrol on Thursday based on average international oil price and rupee-US dollar exchange rate in the previous fortnight.

With international gasoline rates, against which petrol is benchmarked, falling to USD 114-115 from USD 124 (that was taken into account for the steep Rs 7.54 a litre hike effected from May 24), there existed a scope for reducing prices by Rs 1.50-1.60 a litre.

"If they (oil companies) would have reduced rates today, the Opposition would have gone to town claiming that their Bharat Bhandh was successful which forced the government to cut prices," an industry official said.

Sources said the oil companies may take a call on Friday on the quantum of reduction considering that rupee has depreciated further against the US dollar - from Rs 53.17 to a dollar to Rs 55.30. Rupee depreciation raises cost of imports.

Every dollar fall in oil price should translates into a cut in product price by 33 paisa. But every time rupee depreciates against US dollar by Re one, it translates into a requirement to raise prices by 77 paisa.