Markets see biggest single-day percentage drop in two weeks

Sensex ended 231 points lower at 25,886 levels, while the Nifty 50 closed 67 points lower at 7,864

Indian equities recorded their biggest single-day percentage drop since November 18, 2015, after the US Federal Reserve Chair, Janet Yellen, signalled at moving ahead with an interest rate hike in its last monetary policy for the year, which will be held on December 15-16, 2015 stating confidence in the US economy.

To further dampen sentiment, survey released by Nikkei/Markit Services showed that India’s service sector growth stagnated in the month of November. The seasonally adjusted Nikkei Business Activity Index showed that the activity fell to 50.1 in November from 53.2 in October –its eight month high.

The Sensex ended at 25,886, 231 points down or 0.9% lower while Nifty 50 closed at 7,864, 67 points lower, or 0.8% down.

Also, the European Committee Bank (ECB) would announce its monetary policy later today. The ECB is expected to ease the monetary policy. 

"The market took cues from the global peers and extended the losing streak. Global investors are sensing that the era of near zero interest rates is coming to an end this month after the FED chairman expressed her confidence about the US economy. This is resulted in a pull back by global funds in the emerging markets. In addition, concerns over today’s ECB policy meet also influenced the market direction," said Vinod Nair, head of fundamental research at Geojit BNP Paribas Financial Services in a note.

In the commodity space, oil prices tumbled 4.6% on supply glut on Wednesday to slip below $40/barrel but traders will watch out for cues from the Organization of Petroleum Exporting Countries’ (OPEC) summit on Friday on production cuts.

"After trading dull for three consecutive sessions, Nifty lost nearly a percent on Thursday and ended around the day’s low. It started on weak note in line with global trend, as majority were under pressure after the Fed Chairperson in her latest statement laid ground for rate hike in this month itself. Though we saw some recovery in middle of the session but it failed to hold for long and fizzled out in last one and half hour," said Jayant Manglik, President, Retail Distribution, Religare Securities.

"Today’s fall in Nifty has further strengthened our conviction that negative to sideways bias is here to stay in index and hence traders are left with no option but to focus on stocks. Choosing the right stock and timing the same is what they should aim for. It’s difficult to name any particular sector for long trades but PSU banks, cement counters certainly looks weak and can be considered for short trades," he adds.

STOCKS IN FOCUS

Out of the 30 stocks from the Sensex pack, 25 stocks ended weak. Lupin, ICICI Bank, SBI ended down between 1-3%.

After gaining over 2% in yesterday’s trade, Tata Steel dipped 1.4%. The company's Singapore-based arm T S Global Holdings executed agreements for loan facilities worth $1.5 billion to refinance the debt which will be used to pay the existing term loan facilities of T S Global Holdings.

Shares of IT and auto companies operating from Chennai were hit badly as incessant rains have marooned the capital city of the Tamil Nadu.  Apollo Tyres, Chennai Petroleum, TVS motors and TCS, Infosys slumped between 1-4%

ONGC lost ground after international consulting firm D&M in a report submitted to the government on Tuesday, has put a question mark on the future production from the five ONGC discoveries. The stock ended at 2.7% down.

Out of the 5 stocks which were on the winning side, Axis Bank climbed 0.7% after it launched a 'display variant' debit card which does away with the hassles of generating one time password (OTP) over SMS while transacting.

Index heavyweight Reliance Industries managed to gain marginally and finished 0.02% after rating firm CLSA maintained a ‘buy’ rating on the stock with a target of Rs.1,230 per share.