Benchmark indices slide on weak global cues

Key equity benchmark indices witnessed a sudden slide during the latter part of the trading session as trading in US index futures pointed to a sharp slide in US stocks later in the global day amid fears the Federal Reserve may raise interest rates this year in the wake of mixed US employment data. The barometer index, the S&P BSE Sensex lost 329.55 points or 1.34% to settle at 24,287.42. The 50-unit Nifty 50 index lost 101.85 points or 1.36% to settle at 7,387.25. A setback in European stocks also triggered the latest slide on the domestic bourses. IT, oil sector stocks and auto stocks led the latest decline on the bourses. The Sensex and the Nifty, both, reversed trend after hitting their highest level in almost one week.

In overseas stock markets, European stocks declined sharply after the latest US employment data raised concerns the Federal Reserve may raise rates this year. Most major Asian markets remain closed for the Lunar New Year holidays. Markets in mainland China and Taiwan are closed all week. Other markets closed today include Hong Kong, South Korea, Malaysia, the Philippines, Vietnam and Singapore. In Japan, the Nikkei Stock Average ended 1.1% higher. Trading in US stock index futures pointed to a sharp slide in US stocks at the opening bell today, 8 February 2016. Trading in US index futures indicated that the Dow Jones Industrial Average could slide 178 points at the opening bell. US stocks closed sharply lower on Friday, 5 February 2016, amid a massive drop in technology stocks and as mixed US employment data raised concerns the Federal Reserve may raise rates this year.

Public sector banks edged higher after the government's latest measures to boost domestic steel sector. Shares of oil exploration and production firms declined along with slide in crude oil prices. Tata Power Company dropped after the company announced weak Q3 December 2015 results.

The Sensex lost 329.55 points or 1.34% to settle at 24,287.42, its lowest closing level since 3 February 2016. The index fell 420.13 points, or 1.7% at the day's low of 24,196.84. The index rose 81.98 points, or 0.33% at the day's high of 24,698.95.

The Nifty lost 101.85 points or 1.36% to settle at 7,387.25, its lowest closing level since 3 February 2016. The index fell 125.90 points or 1.68% at the day's low of 7,363.20. The index rose 23.45 points or 0.31% at the day's high of 7,512.55.

The BSE Mid-Cap fell 0.23%. The BSE Small-Cap index lost 0.02%. The losses for both these indices were lower in percentage terms than those for the Sensex.

The market breadth indicating the overall health of the market turned negative from positive in late trade. On BSE, 1,478 shares fell and 1,193 shares rose. A total of 130 shares were unchanged.

Among the sectoral indices on BSE, the S&P BSE Energy index (down 1.35%), the BSE IT index (down 1.95%), the BSE Oil & Gas index (down 1.48%) and the BSE Teck index (down 1.6%) underperformed the Sensex. The S&P BSE FMCG index (down 1.25%), the BSE Healthcare index (down 0.99%) and the BSE Auto index (down 1.03%) outperformed the Sensex.

IT stocks declined. TCS (down 2.75%), Infosys (down 2.55%), Tech Mahindra (down 0.88%) and Oracle Financial Services Software (down 0.71%) edged lower.

Wipro fell 2.25% at Rs 545.45. The company announced before trading hours today, 8 February 2016, that it has won an IT infrastructure transformation contract from the ASSA ABLOY Group, headquartered in Sweden. ASSA ABLOY is the global leader in door opening solutions. As part of the five-year agreement, Wipro will consolidate ASSA ABLOY's existing data centers in the EMEA region and implement a cloud-based service model, which will include IaaS (Infrastructure as a Service) and PaaS (Platform as a Service). The deployment will leverage Wipro's BoundaryLess Data Center offering and will provide a full suite of IT infrastructure management services to ASSA ABLOY's global organisation. This solution will bring in a high level of agility, and a consumption-based IT service model powered by an user-friendly service catalog, Wipro said.

HCL Technologies declined 1.89% at Rs 853.65. The company during market hours today, 8 February 2016 announced the launch of an Internet of Things (IoT) Incubation Centre in Redmond, Washington, USA, designed to leverage Microsoft Azure IoT Suite to accelerate enterprise IoT adoption.

Auto stocks declined. Tata Motors (down 3.94%), Mahindra & Mahindra (down 1.63%), Ashok Leyland (down 1.32%), TVS Motor Company (down 0.47%), Hero MotoCorp (down 0.44%) and Bajaj Auto (down 0.35%) edged lower. Maruti Suzuki India (up 0.29%) edged higher.

Tata Power Company dropped after the company announced weak Q3 December 2015 results. The stock fell 2.57% at Rs 58.85. The company's consolidated net profit fell 87.63% to Rs 24.46 crore on 2.98% rise in total income to Rs 9313.19 crore in Q3 December 2015 over Q3 December 2014. The result was announced after market hours on Friday, 5 February 2016.

Steel sector stocks were mixed. Steel Authority of India (down 0.49%) and Jindal Steel & Power (down 3.23%) edged lower. JSW Steel (up 0.99%) and Tata Steel (up 0.19%) edged higher. The government set floor price or Minimum Import Price (MIP) on import of a total of 173 steel products into the country in a bid to restrict cheap steel imports which has adversely affected the domestic steel industry. As per a notification issued by Directorate General of Foreign Trade on Friday, 5 February 2016, the government has imposed MIP ranging from $341 per tonne to $752 per tonne on various steel products. The MIP will be in place for a period of 6 months.

Public sector banks edged higher after the government's latest measures to boost domestic steel sector. Bank of Baroda (up 3.03%), Union Bank of India (up 2.59%), State Bank of India (up 2.29%) and Canara Bank (up 2.12%) edged higher. Punjab National Bank (down 0.32%) and IDBI Bank (down 0.18%) edged lower. The government's latest efforts to boost domestic steel sector augur well for public sector banks as they have significant exposure to the steel sector.

Bank of India rose 4.45% at Rs 102.15 after the bank announced that a meeting of the bank's board of directors will be held on 11 February 2016, to discuss the capital raising plans of the bank. The announcement was made by the bank on Saturday, 6 February 2016.

Shares of private sector banks declined. IndusInd Bank (down 3.49%), Kotak Mahindra Bank (down 2.99%), HDFC Bank (down 1.82%), Yes Bank (down 1.23%) and ICICI Bank (down 0.31%) edged lower. Axis Bank (up 2.38%) edged higher.

Shares of oil exploration and production firms declined along with slide in crude oil prices. Cairn India (down 1.85%), Oil India (down 1.67%), ONGC (down 2.43%) and Reliance Industries (down 1.1%) edged lower. Lower crude oil price will result in lower realization from crude sales for oil exploration firms.

Shares of public sector oil marketing companies (PSU OMCs) also dropped. BPCL (down 2.13%) and HPCL (down 0.76%) edged lower.

In global commodities markets, Brent crude oil futures edged lower. Brent for April settlement was down 51 cents at $33.55 a barrel. The contract had declined 40 cents or 1.16% to settle at $34.06 a barrel during previous trading session.

Coal India fell 1.26% at Rs 322.10. Indian Oil Corporation (IOCL) lost 1.1% at Rs 389.95. Coal India on Saturday, 6 February 2016 announced that an MoU has been signed between the company and IOCL for manufacturing of bulk explosives.

Meanwhile, IOCL during market hours today, 8 February 2016 announced that Prime Minister Narendra Modi yesterday, 7 February 2016, dedicated the company's Paradip refinery to the nation. With the commissioning of Paradip refinery, IOCL Group now owns and operates 11 of India's 23 refineries.

Dr Reddy's Laboratories declined 1.24% at Rs 3,070.65. The company announced before trading hours today, 8 February 2016, that its US subsidiary, Promius Pharma, LLC, U.S., has received approval for Sernivo (betamethasone dipropionate) Spray, 0.05% from the US Food and Drug Administration (FDA). Semivo Spray, a prescription topical steroid, is indicated for the treatment of mild to moderate plaque psonasis in patients 18 years of age or older. The commercial launch of the product is planned for the coming quarter, the company said.

Shares of Precision Camshafts closed at Rs 177.25 on BSE, at a discount of 4.7% compared with its initial public offer (IPO) price of Rs 186 per share on its debut on the bourses today, 8 February 2016. The stock got listed at Rs 163.10, at a discount of 12.31% to IPO price of Rs 186. The stock hit a high of Rs 184.70 and a low of Rs 155 in intraday trade. Precision Camshafts, promoted by first generation entrepreneurs Yatin Shah and Suhasini Shah, is one of the world's leading manufacturers of camshafts, a critical engine component in passenger vehicles.

The Sensex has fallen 583.27 points or 2.34% in this month so far (till 8 February 2016). The Sensex has fallen 1,830.12 points or 7% in calendar year 2016 so far (till 8 February 2016). The Sensex is up 447.66 points or 1.87% from a 52-week low of 23,839.76 hit on 20 January 2016. The Sensex is off 5,737.32 points or 19.1% from a record high of 30,024.74 hit on 4 March 2015.

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