The markets witnessed a negative opening following weak trades across the global markets. The BSE Sensex opened at 16,812, down 253 points and the Nifty at 5,053, down 81 points.
The Federal Reserve made it official, yesterday, that there were significant downside risks to the economy even as it launched a new plan, 'Operation Twist', to reduce long-term borrowing costs.
The Fed has revealed plans to shift $400 billion from short-term Treasuries into long-term Treasuries in an effort to boost lending and spur the economy. The Fed's new plan includes lowering long-term borrowing costs in order to bolster the battered housing market.
Overnight, the US markets plunged post the Federal Reserve's announcement. The Dow Jones industrial average dropped 2.5% at 11,125, with all but one of the blue-chip index's 30 components closing in the red. The S&P 500 fell nearly 3% at 1,167 and the Nasdaq shed 2% at 2,538.
In the morning trades, Asian markets have been projecting the evident weakness in the global markets with the Hang Seng, Nikkei and Shanghai Composite indices having shed nearly 1-4% each.
Back home, the Nifty had taken a breather in trade yesterday after Tuesday's strong up move. Analysts suggest that it is likely to get support at around 5,010 - its short-term moving average.
Among the sectoral indices, BSE Metal, Realty and Bankex indices are leading the losses, down nearly 2% each. Sterlite Industries, SAIL, JSW Steel and Hindalco Industries, down 3% each, are the major losers from the Metal' space.
IndusInd Bank, Yes Bank, ICICI Bank and Federal Bank, down 2-3% each, are the top losers among the financials.
On the Sensex, Tata Motors, Sterlite Industries, Hindalco Industries, Tata Steel and DLF, down 3-4% each, are the prominent losers. ONGC, marginally up at Rs 262, is the only gainers from the pack.
The overall market breadth is negative as 1,136 stocks have declined against 383 advancing ones, on the BSE.
SI Reporter / Mumbai September 22, 2011, 9:40 IST