Another bad day at the office as poor IIP numbers, weak global cues play spoilsport Analysis for May 11, 2012

An unexpected decline in domestic industrial production led to heavy selling on domestic bourses as investors pondered over the fate of the Indian economy. The Sensex extended its losing streak to a fourth straight session as poor IIP numbers, coupled with weak global cues played spoilsport.

A shocking decline in the IIP signaled waning domestic and overseas demand and clouded the outlook for Asia's third largest economy. India's industrial output contracted 3.5 per cent, year in year in March 2012, compared to the annual 4.1 per cent rise in February 2012.

BSE SENSEX closed at 16,292.98, down by 127.07 points or by 0.77 per cent and the NSE Nifty ended at 4,928.9, down by 36.8 points or by 0.74 per cent.

The BSE Sensex touched intraday high of 16,447.24 and intraday low of 16,233.76 The NSE Nifty touched intraday high of 4,976.25 and intraday low of 4,906.15.

Meanwhile, the BSE MIDCAP closed at 5,948.71, down by 49.61 points or by 0.83 per cent, while the BSE SMLCAP ended at 6,395.38, down by 58.82 points or by 0.91 per cent.

After witnessing a gap down opening amid weak Asian cues, the benchmarks extended losses as the weak IIP data escalated selling pressure. The benchmarks continued to languish in the negative terrain in afternoon trade but buying in auto and banking stocks led recovery efforts as the Sensex erased gains and touched the baseline. However, the recovery was short-lived as weak European cues amid the Greek political impasse saw the benchmarks close lower for yet another day.

On the Sectoral front, Health care and Power fell 1.97 per cent and 1.40 per cent, respectively.

The Market breadth, indicating the overall health of the market, was weak. On BSE out of total shares traded 3478, shares advanced were 1003 while 1842 shares declined and 633 were unchanged.

The top losers of the BSE Sensex pack were Tata Power Company Ltd. (Rs. 92.45,-4.89%), Sun Pharmaceutical Industries Ltd. (Rs. 569.70,-3.87%), Hindalco Industries Ltd. (Rs. 113.50,-3.32%), Coal India Ltd. (Rs. 314.45,-2.21%), Maruti Suzuki India Ltd. (Rs. 1234.00,-2.10%), among others.

Asian markets fell for a third straight day as China's industrial output expanded at the slowest pace in nearly three years in April 2012, raising fears of a hand landing in Asia's largest economy. Shanghai Composite ended down 0.63 per cent, Hang Seng closed down 1.30 per cent and Nikkei 225 shed 0.63 per cent.

Among the European bourses, CAC 40 was down 0.96 per cent, DAX was down 0.50 per cent and FTSE 100 was trading lower by 0.57 per cent at 16:45 PM IST.