Sensex sinks 351 pts as drought fears loom

The benchmark BSE Sensex cracked the 27,000-mark today by falling 351 points as investors trimmed positions in realty and FMCG stocks as hopes of another rate cut this year took a hit on fears of a drought in the country.
Market took further jolt after services sector activity contracted for the first time in 13 months in May, largely due to decline in new order flows amid competitive pressure.
In last two sessions, the Sensex has lost 1,011.79 points.
The Met department has projected monsoon this year to be "deficient", which has triggered fears of a drought.
The RBI yesterday lowered borrowing costs by 0.25 per cent but linked further reductions to the monsoon.

Reacting to developments, NSE Nifty ended with a loss of 25.25 points at 8,102.10 -- its weakest close since December 17.

The Sensex after remaining in positive zone briefly at the outset, slipped into the negative zone and dipped below the 27,000-mark to hit a low of 26,698.26.
It settled 351.18 points or 1.29 per cent lower at 26,837.20.
The 50-scrip Nifty after breaching the key 8,100-mark intra-day to touch a low of 8,094.15 ended at 8,135.10, down 101.35 points or 1.23 per cent.
The biggest selloff was seen in realty stocks, with the BSE realty sector index sinking 5.54 per cent.

Unitech crashed 35.17 per cent and HDIL tanked 6.03 per cent, while DLF stocks fell 2.48 per cent.
Shares of Nestle India saw another session of selling pressure and slumped 9.21 per cent amid growing concerns about safety standards of its popular Maggi noodles.
Interest-sensitive stocks, SBI, ICICI Bank, Yes Bank and Canara Bank bore the brunt for the second straight session.
Globally, Asian markets ended on a mixed note, while European markets were lower in their early trade as investors awaited the outcome of Greek debt talks and the European Central Bank's monthly interest-rate announcement.
Tata Power shares was the biggest loser by falling 6.13 per cent on the Sensex. Shares of ITC, Vedanta, GAIL, ONGC, BHEL, Hindalco, HUL, Tata Motors, Dr Reddy's, Sun Pharma and M&M also weighed heavily.