Market drops for second day in a row

Key benchmark indices dropped for the second day in a row today, 10 June 2016 as weakness in global stocks spoiled investors' sentiment. The barometer index, the S&P BSE Sensex shed 127.83 points or 0.48% at 26,635.63, as per the provisional closing data. The losses for the Nifty 50 index were lower in percentage terms than those for the Sensex. The Nifty dropped 31.40 points or 0.38% at 8,172.20, as per the provisional closing data. The Sensex and Nifty, both, hit their lowest level in more than one-week.

The Sensex dropped 142.96 points or 0.53% at the day's low of 26,620.50 in late trade, its lowest level since 31 May 2016. The barometer index rose 208.60 points or 0.77% at the day's high of 26,972.06 in mid-morning trade. The Nifty fell 40.75 points or 0.49% at the day's low of 8,162.85 in late trade, its lowest level since 2 June 2016. The index rose 62 points or 0.75% at the day's high of 8,265.60 in mid-morning trade.

In overseas stock markets, Asian and European shares edged lower on concerns about global economic slowdown and concerns over the 23 June 2016 referendum that could see Britain exit the European Union. Earlier this week, the World Bank revised its global economic growth forecast for calendar year 2016 to 2.4% from the 2.9% projection in January. Key indices in UK, Germany and France dropped by between 1.57% to 2.07%.

The UK government holds a referendum on 23 June 2016 on whether the country should remain a member of the EU. The Organization for Economic Cooperation and Development (OECD) has warned that Britain's leaving the EU -- the so-called Brexit -- could send shocks through global financial markets. The OECD said on 1 June 2016 that a United Kingdom vote to leave the EU would trigger negative economic effects on the UK, other European countries and the rest of the world. Brexit would lead to economic uncertainty and hinder trade growth, with global effects being even stronger if the British withdrawal from the EU triggers volatility in financial markets, the OECD said. By 2030, post-Brexit UK GDP could be over 5% lower than if the country remained in the European Union, the OECD said.

Trading in US stock index futures indicated decline for US stocks at the opening bell later in the global day. Trading in US index futures indicated that the Dow Jones Industrial Average could slide 98 points at the opening bell. US stocks dropped yesterday, 9 June 2016, after three days of gains as a decline in crude oil futures sapped risk appetite.

Closer home, the market breadth indicating the overall health of the market was negative. On BSE, 1,361 shares fell and 1,218 shares rose. A total of 186 shares were unchanged The BSE Mid-Cap index provisionally fell 0.4%. The BSE Small-Cap index provisionally dropped 0.2%. The decline in both these indices was lower than the Sensex's decline in percentage terms.

The total turnover on BSE amounted to Rs 2361 crore, lower than turnover of Rs 2801.30 crore registered during the previous trading session.

IDFC gained 3.66% to Rs 51 after a bulk deal of 12.02 lakh shares was executed in the scrip at Rs 50.50 per share at 13:00 IST on BSE.

Auto stocks declined. Ashok Leyland (down 1.63%), Maruti Suzuki India (down 1.49%), Mahindra & Mahindra (M&M) (down 0.19%), Hero MotoCorp (down 0.3%), Tata Motors (down 2.02%), Bajaj Auto (down 0.25%) and TVS Motor Company (down 1.34%) declined. Eicher Motors rose 0.36%.

The BSE Auto index had outperformed the market over the past one month till 9 June 2016, rising 5% compared with Sensex's 4.18% rise.

Most realty stocks reversed intraday gains. Indiabulls Real Estate (down 3.6%), Housing Development & Infrastructure (HDIL) (down 0.51%), DLF (down 1.47%), and Oberoi Realty (down 1.12%) edged lower. However, Sobha (up 0.73%) and Unitech (up 4.62%) gained.

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