Despite European markets trading at a five-month high and the Asian indices closing in the green, Indian markets ended lower today after industrial output unexpectedly slumped, exacerbating concerns about economic growth.
The global cues remained sanguine with majority of Asian peers snapping the session in green and the European markets making a positive start but there were troubles on the domestic front with India’s IIP, registering a negative growth of 1.8% in June 2012. Planning Commission too expressed its disappointment over decline in industrial output and said that the steps announced by Finance Minister P Chidambaram would help in boosting growth.
The markets had slipped deep into the red before ending flat with the Sensex losing nearly 200 points from the session’s peak while the Nifty erased more than 50 points from the day’s high. The Sensex ended down 0.11 percent at 17,580.98 points, while the 50-share Nifty fell 0.28 percent lower at 5,322.95 points.
The industrial output has remained fragile in the past few months as growth in all three sectors — mining, manufacturing and electricity dampened. However, this time slump in the manufacturing output mainly triggered contraction of June industrial production, as Manufacturing, which constitutes about 76% of industrial production, shrank 3.2 percent.
Gains in FMCG, auto and metals were offset by losses in oil & gas, banks and healthcare sectors.
The top gainers on the Sensex were Sterlite Industries, up 3.31 percent, M&M up 2.95 percent, HUL up 2.74 percent, Tata Power up 2.70 percent and Coal India up 2.10 percent while, Bharti Airtel down 6.36 percent, SBI down 4.24 percent, HDFC down 3.76 percent Wipro down 1.16 percent and RIL down 0.98 percent were the top losers in the index.
Bharti Airtel shares slumped 6.3 percent, dropping for a second day as banks including Goldman Sachs and Standard Chartered cut their ratings on India’s top telecoms carrier in the wake of disappointing quarterly earnings.
Ranbaxy Laboratories dropped 2.5 percent after posting a net loss, while State Bank of India fell 4.3 percent, on worries the country’s biggest lender would post disappointing earnings on Friday.