Markets pare gains after dismal June IIP

Realty and oil & gas stocks lead decline

Markets have slipped from the highs of the day in late morning trades after government data showed lower-than-expected Index of Industrial Production (IIP) for June. The Sensex was trading near the low of 17,631 - up just 35 points. Earlier in the day, the index had touched a high of 17,703. Nifty was up nine points at 5,347.

India's industrial production contracted 1.8% in June, driven down by a slump in manufacturing, government data showed today. Analysts had expected a rise of 1% in June output, a Reuters poll showed. The output for May was revised to 2.5% from 2.4%. Manufacturing, which constitutes about 76% of industrial production, shrank an annual 3.2% from a year earlier, the federal statistics office said.

Asian shares inched up on Thursday with investors turning to data from China for any policy implications on future stimulus, amid guarded optimism for decisive action by Europe to tackle the euro zone debt crisis and global growth slowdown. Nikkei was up 0.8% at 8,956 while Shanghai and Hang Seng added 0.3-1% each.

From the sectoral pack, BSE capital goods index led the fall. The index is down 1% at 9,792. Realty and oil & gas indices were down marginally as well. However, BSE FMCG and IT indices held on to gains and were up 1% each.

Mahindra & Mahindra continued to shine and was up 3% at Rs 746. Sterlite and Coal India added 2% each. Hindustan Unilever, Bajaj Auto and ICICI Bank were up over 1% each.

On the other hand, Bharti Airtel continued to reel under pressure after reporting disapointing numbers on Wednesday. The stock was down 4.5% at Rs 262. HDFC, Tata Motors and SBI were down 1-3% each.

Cairn India dipped 3% to 316 after the company said its MD and CEO, Rahul Dhir, has decided to step down effective August 31, 2012 to pursue his entrepreneurial interests.

Power Finance Corporation (PFC) traded higher by 3.5% at Rs 192 after reporting a 42% year-on-year (yoy) jump in net profit at Rs 972 crore for the first quarter ended June 30, 2012. Net interest income grew 41% at Rs 1,394 crore on yoy basis.

Apollo Tyres will invest Rs 300 crore in its Kalamassery unit in Kerala in the next two years and make it an export unit for industrial tyres, a top official has said. The stock jumped 3% to Rs 296 following the news.

BSE market breadth was marginally negative. Out of 2,391 stocks traded, 1,066 shares advanced while 1,194 shares declined.