Sensex, Nifty set for big fall, Asian stocks drop sharply
Google and Facebook have the same number of users. However, Google's net profit and revenue is 10 times that Facebook. Yet, at over $ 100bn, the stock market is giving a market value to Facebook that is only half of Google.
The BSE Sensex and the NSE Nifty look set to open gap down Friday as global cues worsened overnight, leading to another selloff in risk assets. At 08.10 am, the Nifty futures on the Singapore Exchange, traded 77 points or 1.6 per cent lower at 4,765.
Negative global news has driven stock prices down and the Sensex has lost over 1,000 points in May. The Nifty, too, is trading well below long term supports.
"The trading window has narrowed... we maintain targets of 4,650-4,700 for the Nifty," independent analyst Sarvendra Srivastava told NDTV Profit.
Japan's Nikkei share average dropped sharply today with securities hammered by fears of contagion from Spain's ailing bank system and a strong yen pushed down exporters.
The Nikkei dropped 2.4 percent to 8,652.04, having dropped through support at 8,800. The broader Topix followed suit with a 2.5 percent fall to 728.81.
"Almost everybody is trading for no longer than a couple of days now and the hedge funds are trying to make hay out of this by shorting stocks aggressively," said a trader at a foreign bank. "They just have the market to themselves and can knock stocks down because there's nobody to support them."
Concerns of a weakening banking sector in Spain could negatively impact its counterpart in Japan and pulled securities down 4.3 percent, with Nomura Holdings losing 4.2 percent.
Banks were also weighed on by a Fitch Ratings report that the world's top 29 banks may need a total $566 billion to meet tougher new capital rules, cutting returns by a fifth and forcing them to curb investor payouts and raise customer charges.
"Even though Japanese stocks are reasonably priced at the moment, fears about Europe are intensifying, and the strong yen won't help matters," said Hiroichi Nishi, equity general manager at SMBC Nikko Securities.
Weak U.S. data overnight contributed to the overall bearish atmosphere.
The euro dropped to a 3-1/2 month low and the dollar went back under 80 yen, sending exporters tumbling. Toyota Motor Co dropped 3.7 percent and was the most heavily traded stock by turnover on the main board. Nikon Corp shed 5.7 percent, underperforming its peers after Nomura downgraded its rating on the camera maker to "neutral" from "buy" and slashed its price target to 2,667 yen from 2,914.
With inputs from Reuters
