Sensex ends 31 points lower as Re, IIP data worry investors

The benchmark BSE Sensex today fell by 31 points to close at one-and-a-half month low of 27,319.56 amid mixed cues of a sharp decline in industrial production in October and zero level inflation in November, completing three days of losses.
Traders said rupee nearing 63-level also weighed heavily on investors. The domestic currency lost 65 paise to end the day's trading at 62.94 against the greenback.
Reacting to IIP data that came after close of market hours on Friday, the 30-share BSE index nosedived by over 245 points in early trade. Markets, however, saw buying picking up after the news of zero level inflation came in raising hopes of a rate cut by the Reserve Bank of India.

Traders said profit-booking emerged at every rise dragging the Sensex down by 31.12 points, or 0.11 per cent, to close at 27,319.56.
The 50-issue NSE Nifty initially came below 8,200-mark but later rebounded to conclude at 8,219.60, still showing a small fall of 4.50 points or 0.05 per cent.
Investor sentiment was also hit by signs of capital outflows, traders said, adding that trends were mixed in overseas markets.

Foreign portfolio investors (FPIs) were net sellers to the tune of Rs 864.96 crore last Friday, as per provisional data available.
"Extending their southward move, equity benchmarks made a weak start on Monday as investors reacted negatively to the weak industrial output data announced late Friday that fell by 4.2 per cent in October ....

"However, contraction in CPI and WPI inflation boosted the hope that the Reserve Bank would start lowering interest rates early next year, which aided some recovery," said Jayant Manglik, President, Retail Distribution, Religare Securities.
Dashing hopes of recovery, the industrial production, as measured by the index of industrial output, contracted by 4.2 per cent in October, the sharpest decline in at least two years, on poor show by manufacturing sector and dip in the output of capital as well as consumer goods, according to government data that after Friday's market hours.
Inflation, however, was at zero level in November, the lowest in about five-and-a-half years, thanks to declining prices of vegetables and fuel items.