Only a close above 5,800 can reverse the current downtrend

The market opened with a downward gap today and continued to fall through the day. By the end of the session the indices hit a low since 6 September 2013 and closed almost at the same level. The Sensex opened at 19,644 and moved down from the level of 19,651 to 19,321 during the day and closed at 19,380 (down 348 points or 1.76%). The Nifty opened at 5,801 and hit a low of 5,719 and closed at 5,735 (down 98 points or 1.68%). The National Stock Exchange (NSE) recorded a lower volume of 48.47 crore shares.

Except for MNC (up 0.06%) and IT (up 0.02%) all the other indices on the NSE closed in the negative. The top five losers were Bank Nifty (2.85%); Finance (2.63%); Metal (2.57%); Realty (2.48%) and Media (2.35%).

Of the 50 stocks on the Nifty, 9 ended in the green. The top five gainers were ACC (1.13%); Hindustan Unilever (0.97%); HCL Technologies (0.86%); BPCL (0.52%) and Lupin (0.20%). The top five losers were NMDC (5.33%); Tata Steel (5.24%); Jaiprakash Associates (4.64%); ICICI Bank (4.59%) and Coal India (4.27%).

The market awaits the current account data tomorrow. India's current account deficit probably widened to as high as 5.4% in the June quarter, but a slowdown in gold imports and a rebound in merchandise exports are expected to narrow the gap in coming quarters.

The government said on Friday that it will allow unlisted Indian companies to list directly and raise capital overseas to retire debt or for acquisitions or operational needs abroad. The move comes at a time when the government is battling to trim the current account deficit and attract dollar inflows.

The rupee was trading weak by 15 paise at 62.65 against the dollar. The rupee had closed at 62.50 on Friday.

The US Congress failed to agree on a new budget and the concern that the US government may headed for a shutdown brought the weakness around the globe. US indices ended in the negative on Friday.

With no compromise in sight, Obama told a White House news conference that Congress must pass a bill to fund the government and failure to do so would destabilise the world economy. The 2014 fiscal year in the United States starts on Tuesday, 1 October 2013, and politicians remain at loggerheads over passing a budget.

Even if Congress resolves the budget fight by the October 1 deadline, US lawmakers would move to the next fiscal dispute over raising the $16.7 trillion debt ceiling.

Except for Shanghai Composite (up 0.68%) all the other Asian indices ended in the negative. Jakarta Composite, top loser, was down 2.43%.

A Chinese manufacturing gauge unexpectedly rose less than a preliminary estimate in September, highlighting challenges for Premier Li Keqiang in sustaining a rebound from a two-quarter economic slowdown. The Purchasing Managers' Index from HSBC Holdings Plc and Markit Economics rose to 50.2 in September from 50.1 in August. The final number was less than last week's 51.2 preliminary reading. A similar gauge from the government is due tomorrow, 1 October 2013.

European indices were trading in the negative. US Futures were trading deeply in the red.