Sensex down 116 points on low factory output and high oil prices

The Bombay Stock Exchange (BSE) Sensex fell for the third straight session today, down 116 points at 18,269, on low factory output and weak overseas markets amid upsurge in global crude oil prices.

Heavyweights such as RIL, ITC, L&T, ICICI Bank, SBI, HDFC and Tata Steel pulled down the Sensex.

The BSE 30-share indicator initially touched a high of 18,399.02 but fell to a two-week low of 18,182.90 before recovering some ground.

It settled at 18,268.54, down 116.36 points or 0.63 per cent. It had lost over 110 points in last two sessions.

The NSE 50-issue Nifty also declined 35.25 points or 0.64oints or 0.64 per cent to end at 5,485.80.

The fall was triggered by reports that the industrial growth rate shrunk by more than half to 6.3 per cent in April, on poor show by the manufacturing and mining sectors, a development that the government described as "disturbing".

The Index of Industrial Production (IIP), based on the new series (with 2004-05 base year), declined to 6.3 per cent in April from 13.1 per cent in the same period last fiscal.

As per the old data (with base year 1993-94), the decline was much steeper, with the IIP nosediving to 4.4 per cent in April, from 16.6 per cent in the year ago period.

Finance minister Pranab Mukherjee said, "The IIP growth figures are disturbing."  

Meanwhile, Brent crude prices surged close to $120 a barrel for July contracts, triggering inflation and interest rate concerns. Asian and European stocks showed a mixed trend, with downward bias, on weakness in the global economic recovery and below-expected trade data from China.

Discouraging IIP data followed rise in food inflation report yesterday, worrying already cautious investors concerned over high interest rate regime. RBI's next monetary policy meeting is slated for mid-June.

In Asia, key indices from Hong Kong, Singapore, South Korea and Taiwan closed with losses, while stocks in China and Japan finished with moderate gains.

European markets too displayed a mixed trend: CAC was down 0.42 per cent, while DAX was up 0.17 per cent and the FTSE by 0.07 per cent.

Overall, 25 out of 30 Sensex-based stocks finished with losses while others closed with gains. DLF dropped 1.83 per cent, ITC (1.69 per cent), L&T (1.64 per cent), REL Infra (1.52 per cent), Tata Steel (1.36 per cent), Hero Honda (1.23 per cent), ICICI (1.06 per cent), RIL (1.06 per cent), NTPC (1.04 per cent), Cipla (1 per cent), SBI (0.89 per cent) and Bharti Airtel (0.69 per cent).

From the 13 sectoral indices, BSE-Consumer Durables settled in the green, while others closed with losses. Capital Goods dipped 1.08 per cent, FMCG by 1.04 per cent, Realty by 0.80 per cent and Metal by 0.73 per cent.

The total market breadth at BSE remained negative as 1,650 stocks ended in the red while 1,197 settled in the green. The total turnover was relatively high at Rs2,638.60 crore from Rs2,359.01 crore yesterday.