European woes drag Sensex lower, gold at new high

15:30 pm: Extreme volatility marked the entire trading session today. The Vix index climbed to a high of 37, indicating higher expectations of market volatility, before finally retreating to 35. The Sensex tumbled more than 500 points at the open, but climbed into the green with a 100-point-gain by mid-session. The index finally closed 95 points lower at 16,891, after extreme pessimism in the European markets spread to local bourses. The Nifty closed 35 points lower at 5,083. The IT index dropped 3 percent on the BSE, over the muddying outlook for Indian tech firms, whose main markets are Europe and the US. The turmoil in equity markets helped gold prices, which spiked to a new high of $1,775 per ounce.The rupee weakened to 45.30 against the dollar, after sinking to 45.55 earlier in the day on worries that foreign investors would pull out funds from the country.

15:15 pm: Auto and fast-moving consumer good stocks remain relatively steady, as investors eye stocks that are insulated from the global financial market turbulence. Stocks that caught investor attention were those benefiting from a possible pause in interest hikes, falling crude prices and domestic demand. ITC, HUL, M&M, Bajaj Auto and Maruti Suzuki were gainers on the BSE, even as the Sensex itself is 119 points lower at 16,870.

14:55 pm: Gold surges to $1,775 per ounce as investors dive into the safe haven, fleeing European stocks. European markets are awash in red, losing 3-5 percent. The precious metal has gained $110 in two trading sessions – a spectacular run. Back home, investors seem to be in sullen mood as well, as the Sensex tumbled 160 points to 16,828. The rupee has weakened to 45.33 against the dollar, over fears of increasing fund flows out of the country.

14:40 pm: The European markets continue to reel as investors fail to see any concrete resolution to the debt crisis in the region. Most major markets in the region are about 4 percent lower. There is talk that France’s ratings might be downgraded next, after the US. The Indian markets have fallen, in tune with the prevailing mood. The Sensex is 214 points lower at 16,775. An expert from Citi earlier told CNBC that Indian markets are unlikely to witness a rally unless there is more clarity on global issues. Market attention is increasingly turning to the Federal Reserve meeting that will be held on Tuesday( US time) for any clues on whether the US central bank will take any measures to calm the markets. HSBC Global AMC, however, has said that it doesn’t expect any quantitative easing (QE3) measures to be announced at the meeting.

**14:05 pm:**The European markets are witnessing intensified selling pressure: the FTSE and CAC are 4 percent lower and the Dax has lost 5 percent. It looks like European traders are still suffering a severe loss of confidence caused by a downgrading of US debt and the growing sovereign debt crisis in the eurozone. The Sensex has succumbed to the sell-off: the index is down 261 points at 16, 728.

13:45 pm: The Sensex has plunged more than 250 points to 16,740. The Nifty, at 5,044, has lost 44 points. Yet M&M continues to hold strong: the stock is up 3 percent on both exchanges. Ambuja Cement and Cairn are also 2 percent up. Tata Steel, on the other hand, has sunk 4.6 percent, while Tata Motors has declined 4.3 percent, as worries increased over the group’s international operations. The Vix index surged to 35, indicating increasing expectations of market volatility. European markets are about 2 percent lower.

13:15 pm: The Sensex has tumbled 130 points to 16,860, while the Nifty is 38 points lower at 5,079.On the BSE, TCS is at Rs 967, down 4 percent. Cipla is another big loser, giving up 3 percent. On the NSE, Reliance Power (down 7 percent) and Reliance Infra are the top losers. Currently, European market are in the red after opening marginally higher – the FTSE, DAX and CAC are about two percent lower.

12:55 pm: The Sensex has erased its gains of the day – a little more than 100 points – and is down 10 points at 16,979. The Nifty is three points lower at 5,115. The rupee is trading is 45.23, which is an 11-week low.

12:30 pm: The Sensex and Nifty turn positive. The Sensex has crossed 17,000 and is up 65 points and the Nifty is up 21 points at 5,140.

12:25 pm: Sensex is at 16,966, just 24 points down. The Nifty is just 2 points short of turning positive at 5,115.India’s Vix index is at 32, off the day’s high of 34. Vix is a gauge of market volatility. Lower the index, lower are the expectations of volatility. It suggests improving market sentiment. In terms of market breadth, one share is gaining for every two shares falling – a big improvement over recent days.

12:00 pm: The Sensex is gaining confidence: it’s down only 73 points and trading at 16,916. The Nifty is 22 points lower at 5,096.The Asian markets are also off the day’s lows: the Shanghai market is up marginally, while the Hang Sang and Seoul Composite indices are down 4 percent. The rupee is below the Rs 45 level, and is currently trading at 45.17 against the dollar. After a harrowing day for US stock markets, Dow futures are up 7 percent.

11:35 am: The BSE IT index lost 11.3 percent over the past one week, while the metals index lost about 9 percent. The auto index, currently the only positive index, has lost 6 percent in the same period. IT stocks continue to face selling pressure, although the Sensex has trimmed its losses to 110 points. Currently, the index is trading at 16,870. The Nifty is inching closer to 5,100 and is down just 28 points.

11:10 am: The Sensex has recovered from the day’s 500-point-plus drop; currently, it is 240 points lower at 16,750. The Nifty is 64 points lower at 5,053. Asian markets have recovered to some extent as well. CNBC says the Hong Kong and Shanghai markets have trimmed their losses.

10:45 am: The Sensex is still nursing a 300-point loss, and seems range-bound at the moment. The Nifty is down 96 points at 5,022. Five stocks are positive on the 30-share Sensex; HUL is the latest stock to turn marginally positive. The IT index is still the worst sufferer, losing four percent. The metals index has lost two percent while the bank index has given up one percent. The rupee has slipped to 45.24 against the dollar, according to Reuters data.

10:15 am: Auto stocks speed ahead: M&M, Bajaj Auto are winners on both the Sensex and Nifty. ONGC is also among the top index gainers. Internationally, crude oil (Nymex) prices have slipped below $80 a barrel. The Sensex is 297 points down at 16,692, while the Nifty is at 5,029. The indices are relatively steady, compared with the performance of other Asian markets.

9:55 am: The BSE’s IT index is the biggest loser among indices, shedding 3 percent. Metals index also loses 2 percent. The Sensex recovers more than 200 points from opening to trade 304 points lower at 16,686. The Nifty climbs back above 5,000. HCL Tech, whose shares have lost heavily in recent days, says the growth outlook for the company remains largely unchanged. Gold continues to shine – the precious metal is at $1,769 per ounce in Asian trade, another high.

9:35 am: Front-line IT stocks are getting slammed. Wipro and TCS drop 5 percent each, while Reliance Power is the biggest loser on the Nifty. In an interview with CNBC, Rakesh Jhunjhunwala says he would not advise bottom-fishing at these levels. He says that a sharp rebound is unlikely after the market hits bottom. He adds that it will take time for the markets to hit bottom and consolidate. The Sensex is at 16,583, down 406 points. The Nifty is 124 points lower at 4,994.

9:20 am: TCS, Hindalco are the biggest index losers, shedding 5 percent. TCS is trading below Rs 1,000 at Rs 959, while Hindalco is at Rs 144. Enam Securities tells CNBC that investors should expect further selling pressure in IT and metal stocks and pain in the immediate future. The Sensex is down 463 points at 16,527, while the Nifty is 130 points lower at 4,987.

9:15 am: The Sensex tumbles more than 500 points on opening to 16,450. Nifty plunges below 5,000 mark to 4,952.

Watch video:Market meltdown continues; Sensex opens 500 points down, Nifty slips below 5,000-mark.

Continues on the next page

Yesterday S&P 500 fell over 6 percent, its lowest close since September 2010, while the Dow closed well below the 11,000 mark.

Global Markets:

Asian stock markets nosedived on Tuesday and the Swiss franc held near a record high, as investors dumped riskier assets in a global rout triggered by fears that political leaders are failing to tackle debt crises in Europe and the United States.

Major indexes across the region fell between 2 and 5 percent, following drop of more than 6 percent on Wall Street in the first trading session since the historic downgrade of the United States’ AAA credit rating by Standard & Poor’s.

The panicked flight-to-safety pushed gold to the latest in a string of record peaks, boosted the Swiss franc and the yen and lifted Japanese government bonds and, ironically, US Treasuries - the asset directly affected by the downgrade.

Japan’s Nikkei share average fell 3.9 percent and MSCI’s broadest index of Asia Pacific shares outside Japan shed 2.2 percent.

Australia’’s benchmark S&P/ASX-200 index lost 4.5 per cent to 3,806.70. Taiwan’’s TAIEX dropped 4.9 per cent and New Zealand’’s benchmark NZX 50 index shed 3.8 per cent.

The dollar fell to an all-time low near 0.7480 Swiss francs , while the euro plumbed around 1.0640 francs . They later traded around 0.7540 and 1.0680 francs respectively.

Against the yen, the dollar slipped to around 77.45 from above 80 yen just last week, while the euro slid to around 109.75 yen from recent highs around 114.00.

Gold , a traditional refuge from financial storms, hit a record above $1,724 an ounce.

US crude oil futures fell below $80 for the first time since October 2010, dropping more than $2, or nearly 3 percent, to trade around $79 a barrel.