Stocks of metal and auto companies, public sector banks and index heavyweight ITC led losses for key benchmark indices. The barometer index, the S&P BSE Sensex, lost 217.29 points or 0.83% at 25,900.56, as per the provisional closing data. The Nifty 50 index shed 66.70 points or 0.84% at 7,864.65, as per the provisional closing data. The Sensex provisionally closed below the psychological 26,000 mark. The barometer index alternately moved above and below that level in intraday trade after falling below that mark in morning trade. The Sensex and the Nifty, both, hit one-week low as these two key benchmark indices extended losses in late trade. The Sensex lost 260.50 points or 0.99% at the day's low of 25,857.35 in late trade. The Nifty lost 78.05 points or 0.98% at the day's low of 7,853.30 in late trade.
The Nifty hovered in red throughout the trading session. Soon after opening with an upward gap of 6.01 points or 0.02% at 26,123.86, the Sensex slipped into the red and it continued to hover in negative zone in intraday trade.
Data showing slowdown in India's services sector growth last month and prospects of increase in interest rates in the United States weighed on Indian stocks.
The market breadth indicating the overall health of the market turned negative from positive in late trade. On BSE, 1,543 shares fell and 1,242 shares rose. A total of 138 shares were unchanged. The BSE Mid-Cap index was provisionally down 0.42%. The BSE Small-Cap index was provisionally down 0.5%. The decline in these indices was lower in percentage terms than the Sensex's fall.
Meanwhile, the seasonally adjusted Nikkei Services Business Activity Index fell to 50.1 in November from October's eight-month high reading of 53.2, pointing to slowdown in growth in India's services sector. The reading of 50 separates contraction from expansion. Services companies displayed a lack of optimism with regards to the 12-month outlook for activity, as sentiment dropped to the lowest in the ten-year survey history. Difficult economic conditions and weak demand reportedly hit confidence.
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. 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.
The Sensex and the Nifty dropped for the second day in a row today, 3 December 2015.
The total turnover on BSE amounted to Rs 3086 crore, higher than turnover of Rs 3030.55 crore registered during the previous trading session.
Index heavyweight and cigarette major ITC dropped 1.99% to Rs 343. The stock hit a high of Rs 350.80 and low of Rs 342.10.
FMCG stocks fell across the board. Dabur India (down 2.03%), Godrej Consumer Products (down 2.93%), Hindustan Unilever (down 0.85%), Marico (down 1.23%), Nestle India (down 0.78%), Britannia Industries (down 0.54%), Procter & Gamble Hygiene and Health Care (down 0.64%), GlaxoSmithkline Consumer Healthcare (down 0.39%), Colgate-Palmolive (India) (down 0.74%), Tata Global Beverages (down 1.21%), Jyothy Laboratories (down 1.55%) and Bajaj Corp (down 1.92%) fell.
Cipla lost 1.16%. The company announced during market hours that it has launched a novel "5 in 1" anti-ageing skin care product Cutisera developed by Stempeutics.
Bank of Baroda fell 1.47% to Rs 171.20, with the stock extending losses registered during the previous trading session triggered by government ordering a forensic probe into the alleged foreign exchange irregularities at the bank's Ashok Vihar branch. Finance Minister Arun Jaitley in a written reply in Rajya Sabha on Tuesday, 1 December 2015, said that a forensic probe has been ordered into the alleged irregularities in outward foreign remittances to the tune of about Rs 6000 crore from BoB's Ashok Vihar branch. The stock had fallen 2.06% to settle at Rs 173.75 yesterday, 2 December 2015.
Jaitley said that the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) have registered cases on the basis of complaint filed by BoB regarding irregularities in outward foreign remittances from its Ashok Vihar branch, New Delhi through newly opened accounts, to the tune of about Rs 6000 crore. He also said Ministry of Corporate Affairs has ordered investigation in respect of 11 companies involved in the transaction.
Just Dial slumped 5.43% after reports a foreign brokerage has downgraded the stock to 'sell'. According to reports, the brokerage is worried about Search Plus (SP) execution risks and expects core search revenue growth to decelerate to 19% during the period from FY 2015 (year ending 31 March 2015) to FY 2018 (year ending 31 March 2018) due to inadequate investments in the past and rising competition. Successful execution of SP platform would be key to sustainability of core search business and will require significant incremental investments, according to the brokerage. The brokerage has also reportedly pointed out that the company may have to incur higher expenses to maintain growth, posing risks to street earnings per share (EPS) estimates.
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