Weak global market may drag down the markets in early trades.
The market may slip initially following overnight sharp slump in the US markets and in the major Asian indices taking a sharp dip in morning trades may pull down the domestic indices in early trades. On the technical front, the Nifty could test higher levels at 3900 and may find support at 3800, while the Sensex may face resistance at 12750 and find support at 12400.
US indices skidded Monday, with the Dow slumping nearly 778 points, in the biggest single-day point loss ever, after the House rejected the government's $700 billion bank bailout plan. While the Dow Jones dropped 748 points at 10395, the Nasdaq declined 200 points to close at 1984.
All the Indian ADRs bucked the positive domestic markets trend and instead fell in tune with the US indices. Satyam was the biggest loser and dropped over 17% followed by VSNL, HDFC Bank, Infosys, Wipro, Tata Motors and ICICI Bank with loss of 12-16% each. While Dr Reddy, MTNL, Rediff and Patni Computer were down over 4-8% each.
Crude oil prices tumbled more than $10 a barrel Monday - the second biggest drop in dollar terms ever on an active contract - as the government's proposed $700 billion bailout was defeated by the House, adding to concerns about the spread of economic weakness worldwide. While the Nymex light crude oil for October 08 delivery declined by $10.52 to close at $96.37 per barrel. In the commodity segment, the Comex gold for December series gained $5.90 to settle at $894.40 an ounce.
