Sensex slips below 17000; HDFC Bank, TCS, ONGC down 1-2%

The BSE Sensex and NSE Nifty erased all early gains as measures announced by the government to boost economy played spoilsport. Even the Indian rupee came off day's high that was trading at 56.95, a rise of just 17 paise after hitting an intraday low of 56.42 a dollar.

Measures were not enough to give a boost to the market. The government of India hiked the limit of external commercial debt by USD 10 billion. The limit of FII investment in government bonds was also increased to USD 20 billion from USD 15 billion.

The BSE benchmark was down 26.55 points to 16,945.96 and the NSE benchmark fell 12.5 points to 5,133.55.

Country's largest software services exporter TCS and private sector lender HDFC Bank were down 1.5% each.

State-owned oil & gas producer ONGC lost over 2% whereas Reliance Industries rose 0.5%. Rating agency Moody's said RIL's long-term fundamentals were intact. "Fundamentals are intact despite challenge in upstream operations. We are confident that company's proved reserves will eventually increase," agency said.

Top lender State Bank of India was down 0.75% while its rival ICICI Bank moved up just 0.16%.

State-owned capital goods company BHEL fell 1.6% and top two-wheeler major Hero Motocorp tanked 1.9%.

Shares of Infosys, Bharti Airtel, Tata Motors and HUL were marginally lower.

About two shares advanced for every share declining on the National Stock Exchange.

European markets remained under pressure. France's CAC and Germany's DAX fell 1.4% each while Britain's FTSE was down 0.8% as market experts do not expect any major announcement from European Union summit that will be scheduled for June 28-29.