Markets witness highest ever turnover; Sensex sheds 490 points

The benchmark Nifty has seen big carnage today and closed below the psychological 4,900 mark, for the first time in last 52 sessions. Bears completely weighed on the markets and hammered the Nifty to see biggest single day fall since August 2009 while the Sensex shed over 500 points during the day. Weak global cues also weighed on the markets; the Indian Sensex fell 3.5% more than the China's Shanghai Index, year-to-date.

Shankar Sharma, Vice-Chairman and Joint Managing Director, First Global, says the correlation between the United States and emerging markets is set to break. "Emerging markets may lag US markets going forward. They have a high beta and may fall more than the US."

On Indian markets: Sharma says the Sensex can touch 12,000-12,500 in the first half of 2010. "We expect markets to claw back before the budget. It can recover to 17,000 in the second-half."

The markets reported highest ever turnover of Rs 1,82,984.16 crore, including biggest ever NSE F&O turnover of Rs 1,58,503.98 crore, which might be because of margin calls. The NSE cash turnover was at Rs 18,715.98 crore and BSE cash at Rs 5,764.20 crore.

Selling was seen across all sectors; the Realty Index was the major loser, down nearly 8% followed by banking, metal, auto and pharma. However, ITC was the only gainer among the Nifty 50 stocks. The breadth was very bad on the NSE, 21 shares declined as against one share rise on the basis of ratio.

The markets started the day with gap down, reacted to the Tuesday's fall in Asian markets, on the back of news that China implemented a previously ordered increase in reserve requirements for some banks and there were talks that policymakers may take more aggressive action soon. Indian markets were shut on Tuesday on Republic day. In the second half of trade, indices extended losses, on the back of negative sentiment as well as weak global cues.