Sensex logs first fall in three weeks before Fed, Brexit

Caution prevails in choppy trade

Mumbai, June 10: Stocks fell in a volatile trading, tracking declines around the world, as investors turned cautious before key events including the US Federal Reserve meeting.

Tata Motors, the owner of Jaguar Land Rover, dropped for the first time in seven days. Infosys, the second-largest software services provider, was the top loser this week on the Sensex. State Bank of India slid for a second day. Tata Steel Ltd. fell the most in about three weeks.

The Sensex lost 0.5% to 26,635.75 points, its second day of losses. It earlier rose as much as 0.8%. The gauge slid 0.8% this week, ending two weeks of advances. The retreat comes before key events such as the Fed’s meeting next week, followed by the UK’s referendum on the European Union membership on June 23, which have potential to roil markets.

“Brexit is weighing down on the markets globally and that’s pretty much weighing on the Indian markets as well,” Nitasha Shankar, vice-president for equity research at Yes Securities in Mumbai, said in an interview with Bloomberg TV India. “Fortunately, for us on a fundamental side, we are placed quite strongly. So, the impact is not as significant. But until such time this event is behind us, we will continue to see some kind of pressure on the index.”

The MSCI All-Country World Index headed for its steepest two-day decline since May 4, led by commodity producers and financial companies. The Stoxx Europe 600 Index was down 1.8%. The MSCI Asia Pacific Index lost 0.9%.

The Sensex has risen 16% from a low reached in February, putting India on course to become the first among markets valued at more than $1 trillion to crawl back from a bear market. Global investors bought more Indian shares than they sold for an 11th straight day, taking net purchases since April 1 to $1.5 billion.

The monsoon, which accounts for four-fifths of the country’s rainfall, reached Kerala on Wednesday. The government is counting on above-normal precipitation this year to help control food prices, boost farm production and ease a drinking-water shortage caused by back-to-back droughts. Agriculture accounts for roughly 18% of India’s gross domestic product.

Tata Motors declined 2.2%. State Bank of India slid 1.9% to pare this week’s gain to 4.8%. Tata Steel fell 2.2% and Coal India, the world’s biggest miner of the fuel, retreated 2%.

Infosys, which has the highest weight on the Sensex, lost 6.8% this week, its worst performance since the five days through February 12. Chief operating officer UB Pravin Rao said on Wednesday the company expected some “short-term, quarterly bumps” in sales growth.