Sensex drops below 27,000

Key benchmark indices snapped two-day winning streak today, 9 June 2016 as weakness in global stocks dampened sentiment. The barometer index, the S&P BSE Sensex shed 273.26 points or 1.01% at 26,747.40, 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 lost 73.45 points or 0.89% at 8,199.60, as per the provisional closing data. The Sensex provisionally settled below the psychologically important 27,000 mark. The Sensex remained below that mark throughout the session after falling below that level in early trade.

The market sentiment was also affected adversely on concerns that the recent gains in crude oil prices could adversely impact India's fiscal deficit situation and increase fuel price inflation as India imports about 80% of its crude requirements.

In global commodities markets, crude oil prices edged lower on profit booking, though prices remained close to their highest this year triggered by a fall in US crude inventories and supply disruptions. Brent for August settlement was currently down 37 cents at $52.14 a barrel. The contract had risen $1.07 a barrel or 2.08% to settle at $52.51 a barrel during the previous trading session.

The Sensex dropped 328.31 points or 1.21% at the day's low of 26,692.35 in mid-afternoon trade, its lowest level since 2 June 2016. The index fell 25.75 points or 0.09% at the day's high of 26,994.91 at the onset of the trading session. The Nifty fell 88.45 points or 1.06% at the day's low of 8,184.60 in afternoon trade, its lowest level since 2 June 2016. The index rose 0.3 points at the day's high of 8,273.35 at the onset of the trading session.

In overseas markets, European shares dropped for a second straight day after European Central Bank's president Mario Draghi warned today, 9 June 2016 that Europe is at risk of suffering lasting economic damage from weak productivity and low growth. Asian stocks declined as investors weigh risks amid the Federal Reserve's cautious stance about tightening rates. Data showed that China's consumer inflation rose less than forecast in May as pressure from high food prices eased, while producer prices recovered more than forecast. The consumer price index (CPI) rose 2% in May, compared with a 2.3% increase in April. The producer price index (PPI) fell 2.8% in May, easing from a 3.4% drop in April, and rose 0.5% month-on-month. US stocks rose yesterday, 8 June 2016 with Dow Jones Industrial Average rising above 18,000 for the first time since April as a weaker dollar lifted some commodity-related shares.

Closer home, the market breadth indicating the overall health of the market was negative. On BSE, 1,332 shares fell and 1,233 shares rose. A total of 191 shares were unchanged. The BSE Mid-Cap index provisionally fell 0.47%.%. The decline in the index was lower than the Sensex's decline in percentage terms. The BSE Small-Cap index provisionally rose 0.04%, outperforming the Sensex.

The total turnover on BSE amounted to Rs 2547 crore, slightly higher than turnover of Rs 2535.88 crore registered during the previous trading session.

Index heavyweight and cigarette maker ITC shed 2.39% to Rs 354. The stock hit high of Rs 362.75 and low of Rs 353.50 in intraday trade.

Index heavyweight and housing finance major HDFC dropped 1.41% to Rs 1,242.60. The stock hit high of Rs 1,257.80 and low of Rs 1,233.95 in intraday trade.

IT stocks were mixed. TCS (down 1.29%) and Tech Mahindra (down 0.34%) dropped.

Wipro rose 0.42% after the company announced a partnership with Mountain View based Authentise Inc, a leading provider of 3D printing technologies and consulting services. This strategic partnership between Wipro and Authentise will enable adoption of additive manufacturing among the global 2,000 companies, Wipro said in a statement. The announcement was made after market hours yesterday, 8 June 2016.

HCL Technologies rose 1.32% after the company said that it has entered into strategic partnership with two leading automotive solution providers to expand its offerings for the fast-growing smart vehicle ecosystem. The announcement was made after market hours yesterday, 8 June 2016. Working to enhance HCL's existing Smart Mobility and Vehicle Engineering Services, alliances with Movimento and Rightware will bring invaluable services to HCL's clients, the company said in a statement.

Movimento is a leading provider of over-the-air (OTA) update solutions for automotive solution providers. The partnership between Movimento and HCL will offer automotive lifecycle management, updates and support for on-and off-board software, the company said. The company's partnership with Rightware, a leader in advanced user interface (UI) technology for automotive applications, will enable HCL to help automotive solution providers and Tier-1 manufacturers with all aspects of advanced UI creation, including design, development, systems integration, deployment and support, HCL Technologies said in a statement.

Infosys lost 4.27% after the company's chief operating officer UB Pravin Rao was quoted as saying yesterday, 8 June 2016, that the company would face volatility in revenue over the next few quarters. UB Pravin Rao was quoted as saying at an investor conference in Mumbai that the overall demand remains volatile and Infosys does not expect a recovery in spending from the energy sector before 2017. He said that the company is little bit watchful with regard to the outlook for the retail sector too. Rao also reportedly said that the company is facing a slowdown in its enterprise resource planning (ERP) and business process outsourcing (BPO) businesses, adding that the company is working to turn around those businesses. Rao, however, said that the company remains on track to meet its full-year constant currency revenue growth guidance of 11.5%-13.5% for the year ending 31 March 2017 (FY 2017).

Meanwhile, shares of Infosys turned ex-dividend today, 9 June 2016, for final dividend of Rs 14.25 per share for the year ended 31 March 2016 (FY 2016). Before turning ex-dividend, the stock offered a dividend yield of 1.15% based on the closing price of Rs 1,238.30 on BSE yesterday, 8 June 2016.

Hero MotoCorp (down 3.01%), Hindustan Unilever (down 2.28%) and Asian Paints (down 1.89%) were the other major losers from the Sensex pack.

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