Sensex dips 250 points as global equities bleed; Nifty below 8,100

Business standard has posted by Sensex dips 250 points as global equities bleed; Nifty below 8,100 Industrial output contracted 0.8% in April on sharp fall in capital goods production and manufacturing activity further denting sentiments

Markets have opened the session on a dismal note mirroring a steep decline in the Asian equities ahead of the US Fed meet due to begin tomorrow and BOJ meet later during this week amid jitters over the forthcoming referendum on whether the UK would remain in the European Union scheduled on June 23.

Meanwhile, Industrial output contracted 0.8% in April, the first decline in three months, on the back of sharp fall in capital goods production and manufacturing activity which further dented sentiments.

At 9:15 am, the S&P BSE Sensex has dropped 248 points to quote at 26,387 and the Nifty50 fell 73 points to trade at 8,097.

Geojit BNP Paribas in a technical note says “Nifty’s attempts to conquer 8,300 were not very successful last week, and there was a disinclination to chase prices higher. The close near 8,200 would mean that the early part of this week could see attempts to slip even lower towards 8,164 and beyond. The challenge for the week would be to play dips towards 8,065-8,000 region which, as is, poses a platform for a vertical rise towards 8,400-8,500.”

Oil prices fell with international Brent crude oil futures slipping below $50 per barrel, weighed down by growing economic concerns in Asia and strengthening in the US dollar, making fuel imports for countries using other currencies more expensive.

Key macroeconomic data that are lined up are release of consumer price index (CPI) on Monday and inflation based on the wholesale price index (WPI) for May on Tuesday.

GLOBAL MARKET

Asian equities ahead of the US Fed meet due to begin tomorrow and BOJ meet later during this week amid jitters over the forthcoming referendum on whether the UK would remain in the European Union scheduled on June 23.

Japan’s Nikkei tumbled nearly 3% on a strong Yen. Meanwhile, China’s Shanghai Composite, Singapore’s Straits Times and Hong Kong’s Hang Seng dropped between 0.5%-2%.

China's Shanghai is down 0.8% after industrial production data remained unchanged at 6% in May. 

Meanwhile, US markets closed lower Friday, with the Dow Jones industrial average down 0.6% and the S&P 500 was off by  0.92% and the Nasdaq composite lost 1.29%.

STOCKS

The healthcare stocks are outperforming in the weak market with Dr Reddy’s Lab being the top gainer climbing 0.7% as Dr Reddy’s Laboratories is ramping up its US business with the acquisition of eight drugs from the world’s largest generic drug-maker Teva and an affiliate of Allergan for $350 million (over Rs 2,300 crore).

Among its peers, Lupin and Cipla have added 0.4% and 0.2% each.

On the flip side, the Index heavyweights are taking a hit today with Tata Motors, ICICI Bank, SBI and Axis Bank down between 1.8%-2.7%.

Meanwhile, oil exploration majors RIL and ONGC have shed 0.6% and 1.5% each on the back of fall in the crude oil prices. Oil prices fell with international Brent crude oil futures slipping below $50 per barrel, weighed down by growing economic concerns in Asia and strengthening in the US dollar.

In contrast, oil marketing companies are trading firmly in a weak market with BPCL and HPCL up 1.5% each.

Tata Power has acquired the renewable energy (RE) subsidiary of Delhi-based Welspun Energy. It is estimated to be a Rs 9,900-crore deal. Tata Power has gained 0.5%.

Coal India's two subsidiaries Mahanadi Coalfields and Northern Coalfields will buyback total shares worth around Rs 1,978 crore from their shareholders. The stock has shed 0.3%.

The third largest two-wheeler maker in the country, TVS Motor, has set itself the target of capturing 12 per cent of the market share with its Jupiter in the 110-cc scooter segment. TVS Motor is trading flat in the morning trades.