Sensex falls below 26,000 level

Metal and pharma sector stocks and index heavyweights ITC and HDFC led decline as key benchmark indices extended initial losses, with barometer index, S&P BSE Sensex, falling below the psychological 26,000 mark. At 10:20 IST, the Sensex was off 145.85 points or 0.56% at 25,972. The Nifty 50 index was down 43.90 points or 0.55% at 7,887.45. The Sensex hit its lowest level in almost a week when it lost 161.65 points or 0.61% at the day's low of 25,956.20 in morning trade. The Nifty hit one-week low when it dropped 53 points or 0.66% at the day's low of 7,878.35 in morning trade.

The market breadth indicating the overall health of the market was positive. On BSE, 1,067 shares rose and 1,008 shares fell. A total of 89 shares were unchanged. The BSE Mid-Cap index was currently off 0.14%. The BSE Small-Cap index was currently off 0.17%. The decline in both these indices was lower in percentage terms than the Sensex's fall.

In overseas stock markets, Asian stocks declined after hawkish comments from Federal Reserve Chairwoman Janet Yellen reinforced the case for an interest rate hike during the middle of this month. US stocks fell yesterday, 2 December 2015, as Yellen signalled a readiness to hike interest rates and US data indicated a solid labour market. Yellen said she was looking forward to a US rate hike that will be seen as a testament to the economy's recovery from recession, although she did not indicate if she still expected a hike would be warranted at the Fed's last policy meeting of the year on 15-16 December 2015.

Investors in emerging markets, including India are worried that once the Fed starts raising interest rates, it will drain liquidity from global emerging markets and redirect it to developed economies. The Fed has held its benchmark short-term interest rate near zero since December 2008. The ultra-loose monetary policy in the US has encouraged heavy investment in higher-yielding emerging markets.

IT stocks witnessed a mixed trend. Tech Mahindra (down 0.4%) and HCL Technologies (down 0.86%) declined. TCS (up 0.18 %) and Infosys (up 0.36%) gained.

Wipro gained 0.13% after the company announced that it has signed an agreement with Landesbank Baden-Wuerttemberg (LBBW) to acquire 100% equity stake in cellent AG for 73.5 million euros. cellent AG is a leading IT consulting and software services company and has been offering holistic innovative IT solutions and services to its customers in the DACH region of Germany, Austria and Switzerland for the past 14 years. cellent AG clocked revenue of 87 million euros in the year ended 31 December 2014. This acquisition will provide Wipro with significant scale and prime customer relationships, especially in the manufacturing and automotive domains, which are key industry sectors in the DACH region. The acquisition is expected to be concluded in Q4 March 2016.

Metal and mining stocks declined. Jindal Steel & Power (down 1.37%), Vedanta (down 2.28%), Tata Steel (down 1.72%), NMDC (down 0.79%), Hindalco Industries (down 1.62%), Steel Authority of India (down 1.37%), JSW Steel (down 0.94%), Hindustan Zinc (down 0.52%) and National Aluminium Company (down 1.11%) edged lower. Bhushan Steel jumped 14.77%.

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