Steep drop in commodities, especially crude, is a positive. But, unfortunately for India the crash in the rupee has eroded much of those gains.

Steep drop in commodities, especially crude, is a positive. But, unfortunately for India the crash in the rupee has eroded much of those gains.

It’s a falling Friday at start as indices brace for a big gap-down. The seemingly endless bloodbath in world markets continues and it’s a no-brainer that the source of continued trepidation is Greece and growing concern about the possible spread of the debt contagion to Spain and Italy.

Borrowing costs for Spain surged even as official data has confirmed a recession. Bankia shares crashed on reports of large deposit withdrawal. Moody's has downgraded 16 Spanish banks as well as 4 Spanish regions.

Steep drop in commodities, especially crude, is a positive. But, unfortunately for India the crash in the rupee has eroded much of those gains. The fragile rupee is also likely to make it tough for India Inc. to repay overseas debt. Export-oriented sectors could benefit though from a weaker rupee.

Risk remains a dangerous word for now and safety is top priority. The dollar and treasuries remain safe havens. Even gold has not been spared. The 10-year US bond yield is at record low. Stock indices in the US and Europe continue to tumble while Asian markets are shaky. In short, the trend remains down with 4800 on the Nifty under threat. Coal India, SBI and Tata Steel will announce their results.

Sentiment towards Spain is turning worse by the day, mainly because of a loss of confidence in the Prime Minister Mariano Rajoy government's approach to tackling the problems in the banking sector. Spain is facing a prolonged slump as the turbulent eurozone struggles to balance austerity with growth.

Key Results Today: Alok Industries, Coal India, Deepak Fertilizers, Hindustan Oil Exploration, HT Media, Karnataka Bank, Manappuram Finance, Panacea Biotec, Petron Engineering, Saint Gobain, SBI, Tata Steel, Torrent Pharma and TV Today.
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