Pre Market Commentary ...

Speculation has been rife about a possible disintegration of the euro-zone and erosion in its common currency despite several measures to stem the debt contagion. This has sent markets into a tailspin as risk appetite has taken a severe beating owing to concerns that the European debt disaster could derail the worldwide recovery. As a result, the bulls have their backs against the wall and may remain on the defensive if the European crisis doesn’t subside.
Brace yourselves for another gap-down opening. Should the global picture change for the better, we may see the key indices do a bungee-jump, but then at the end of it you may still be left hanging. Betting on a major rally from here on would be like catching a falling knife. Fear is running very high amid significant external uncertainties. The bravehearts among you could look at snapping up good bargains at lower levels, but we would advise against any kind of adventure right now.

The NSE Nifty has failed to rebound after slipping below 200-day DMA and could be headed for further downside. What’s worse the S&P 500 index in the US has cracked below 200-day DMA thanks to disappointing economic data and nagging worries over the euro-zone debt crisis. Meanwhile, the US Senate has approved the most significant increase in the regulation of US banks since the Great Depression. The bill now goes to the House to iron out difference.

Asian markets are trading sharply lower, with many bourses at year-to-date lows. European shares were also battered though the euro recovered following the release of a few weak economic reports in the US.