Third day of losses for the markets

The weakness became a slide today as the indices posted the third straight day of losses. After opening weak the market slipped throughout the day and closed almost at the lows of the day. Sensex closed at 6498, down 82 points and the Nifty at 2008, down 23 points.

Among index stocks Punjab National Bank, HDFC Bank and Bajaj Auto were the biggest percentage gainers while Nalco, Satyam Computers and L&T were the major losers.

On Friday, US markets declined even as oil dropped to $53.32 to a barrel. The sharp fall in oil futures led to a weakness in oil stocks which have a large weight on the indices. However, the fear of a rebound in oil prices is keeping the rest of the market also weak. An earnings downgrade from General Motors and Ford Motors also led to the weakness. The weak US closing had its impact on other Asian markets as well, all of which opened in the red today.

Centre for Monitoring Indian Economy (CMIE) released its forecast for the Indian economy for FY 2005-06. The think tank expects the economy to grow by 6.6 per cent on the back of an improved performance by agricultural sector which is expected to grow 3.1 per cent. Industry growth is expected to be marginally higher at 8.5 per cent as against the 7.3 per cent of FY 2004-05 while services sector growth is projected to decline to 7.5 per cent from 8 per cent.

The Centre for Mathematical Modeling and Computer Simulation expects above normal monsoons in June which may lead to flooding. The research institute expects the monsoon to hit the Kerala coast on 26 May.

Power equipment major ABB recovered from its morning weakness on news of an order received by the company's parent ABB of Sweden from NTPC and Powergrid. The order, worth $80 million, is for supply of transformers and transmission equipment. ABB India is expected to get a part of the contract and maintenance contracts in future. The stock closed with gains of over a per cent.