Domestic equity markets witnessed notable losses on Thursday tracking mixed global cues and disappointing earnings performance from few of the leading corporates. The local markets were in a sombre mood since beginning and gyrated in a narrow range till afternoon trades. But the situation worsened after the engineering and construction major -- Larsen & Toubro -- announced its third quarter results in late afternoon trades. Its December quarter net tumbled 50% to Rs 758.82 crore on year-on-year basis. Execution delays impacted the quarterly performance, claimed the management of the company. Besides, state-owned Bharat Heavy Electricals' (BHEL) sales growth for December 2009 quarter also remained below the street's expectations. Selling pressure was so intense that the markets shrugged off even the late recovery shown by most of the Asian indices and positive start for European equities. The NSE's 50-share Nifty broke all crucial support levels to end below the 5100-mark. Investors looked sceptical about further rally in equities after strong run up for past couple months. Food inflation based on the wholesale price index (WPI) for the week ended January 9 has come marginally lower at 16.81% compared to 17.28% in the earlier week. Capital goods, power and public sector undertaking counters were the biggest draggers for the markets in trade. The broader indices also remained battered. Finally, the BSE Sensex plummeted 423.35 points or 2.42% to close at 17,051.14, while the S&P CNX Nifty tumbled 127.55 points or 2.44% to settle at 5094.15.

US markets suffered steep decline for the second consecutive day as the President Barak Obama proposed new bank rules that would squeeze profits of big banks and change the way they make their money. Obama said Thursday, he would ask Congress for limits on how big banks can become and to end some of the risky trades financial companies use to supercharge their earnings. Investors totally left the banking stocks in the day's trade to lose, Bank of America, Citigroup Inc. and JPMorgan Chase & Co. each lost more than 5 percent. The Dow Jones Industrial Average plunged by 213.27 points, or 2.01%, to 10,389.88, its biggest point and percentage drop since October 30. The broader Standard & Poor's 500 index lost 21.56 points, or 1.89%, to 1,116.48. The Nasdaq composite index fell 25.55 points, or 1.12%, to 2,265.70.

Crude prices slumped to four-week lows on Thursday in a sell-off triggered by government data showing an unexpected large build in gasoline stocks last week. Gasoline supplies jumped 3.9 million barrels, rising for a third week in a row, to 227.4 million barrels, much higher than the forecast. Though,the US crude stocks fell 400,000 barrels to 330.6 million barrels last week, the EIA said, against the forecast for a 2.4 million barrel draw and the API's 1.8 million barrel decline. Benchmark crude for March delivery settled down $1.66, or 2.14 percent, at $76.08 a barrel, down a second day on New York Mercantile Exchange. In London, March Brent crude ended down $1.74, or 2.28 percent, at $74.58 a barrel.

The Indian rupee continued its decline for the second consecutive day on Thursday on the back of strengthening dollar and plunge in the stock markets. The domestic currency made a weak start tracking the declines in the global markets on the concerns of China's curbs on bank lending. The rupee traded range bound but as soon as the equity markets turned choppy and started declining it too followed the same route and declined to its two month low. Finally the rupee closed at 46.04, 10 paise weaker compared to its Wednesday's close of 45.94.

The FII on Thursday were the net sellers in both equity as well as debt segments. In equity segment the gross buying was of Rs 2711.70 crore against gross sell of Rs 2744.00 crore, while in the debt segment the gross purchase was of Rs 540.30 crore with gross sales of Rs 633.00 crore.

The US markets suffered another sharp decline on Thursday as the Obama proposed new rules to check the profits and working of large banks. All the major indices once again lost more than 1% while the Dow suffered its biggest decline. The Asian markets have made a very weak start and most of the indices are trading with a cut of more than 1.5%.The local markets plunged in the late hours on weak global and domestic triggers while the cue for the markets today remains of a similar start. Lots of big companies will be announcing their December quarter results today and only scrip specific movement can be expected.

Support and Resistance: S&P CNX Nifty and BSE Sensex

                                                          Nifty Top volumes

• Tata Steel will set up a 3.6 million tonne per annum (mtpa) coal-to-liquid project in Orissa in partnership with Sasol Synfuels of South Africa.
• ICICI Bank has reported a 26.36% drop in consolidated net profit at Rs 1,148.66 crore for the third quarter ended December 31, 2009.
• SAIL has signed MoU with the Birla Institute of Management and Technology and the Institute of Management Technology, for academic collaboration.
• L&T posted net profit of Rs758.82 crore for Q3FY10 down by 50.09% against Rs 1,520.44 crore in Q3FY09.
• NTPC is planning to get into the liquefied natural gas fuel chain by leveraging the upcoming Dabhol LNG terminal to mitigate fuel risks.