The Sensex ended slightly lower on Monday after a surprise contraction in industrial production and other data showing a fall in exports and high consumer inflation deepened fears about the economy, hitting capital good stocks especially hard.
However, United Spirits shares posted their biggest single-day share gain since at least 1995 after its stake sale to Diageo spurred upgrades from several analysts, who called the deal “transformational” and a “game changer”.
The weak data is due to add pressure on the government to take more action to revive growth after already announcing a slew of fiscal and economic measures in September, including opening up the multi-brand retail sector to foreign investors. That’s especially the case as the Reserve Bank of India has signalled it won’t cut interest rates until the January-March quarter, shifting the focus to the parliament session due to re-start on November 22.
The Sensex fell 0.07 per cent, or 13.34 points, to end at 18,670.34.
The 50-share NSE fell 0.04 per cent, or 2.55 points, to 5,683.70.
Both indexes fell for a third consecutive session. Markets will be opened tomorrow for a short trading session during the Diwali public holiday, and will close on Wednesday.
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Capital good stocks were among the day’s leading decliners after industrial output unexpectedly fell 0.4 per cent in September, well below expectations for a 2.8 per cent advance.
The manufacturing output slumped 1.5 per cent from a year earlier, the data showed, sending Larsen & Toubro Ltd, India’s top construction and engineering company, down 0.9 per cent. Smaller rival Punj Lloyd Ltd fell 1.4 per cent.
Other data on Monday showed India’s trade deficit last month reached $20.9 billion as exports fell but imports jumped, while consumer price inflation rose 9.75 per cent in October.