Global cues drive Nifty moderately lower amid choppy trade

Indian equity benchmarks saw moderate sell-off on Monday amid a choppy trade, tracking fall in global markets on profit booking. Gold, a safe commodity against risky assets, hit a new all-time high today on reports that there could be more money printing in the US.

Market was in a consolidation mode for second consecutive session. Anand Tandon, CEO of JRG Securities said it could run either way because it depends on what kind of solution the European market and then subsequently the US Fed comes up with.

"There is now apparently an increased likelihood that we will see another bout of money printing going through and the initial reaction of that will be a higher risk appetite and consequently higher markets, perhaps for emerging markets like in India. Post that however, we have seen that in the last two cases of increase in money supply, it hasn't actually led to any sustained rise in the markets and I would expect that the same would be mirrored this time as well, perhaps even with a lower beta," Tandon explained.

The 30-share BSE Sensex fell 54.88 points, to close at 18,507.04 and the 50-share NSE Nifty lost 14.05 points, to settle at 5,567.05. 

Possibility of US debt default and endless European debt crisis dampened the mood of investors as well as traders globally. European markets like France's CAC, Germany's DAX and Britain's FTSE were trading one percent lower. Dow Jones and Nasdaq futures too declined over 0.5%. Asian markets closed marginally in the red as well in the second half of trade.

Rating agency S&P threatened downgrade of US financial companies if a deal to lift the US debt ceiling and cut the deficit is not announced. President Barack Obama will consider ways to lift the US debt ceiling and reduce the deficit on August 2.