Markets drop on rising inflation

RIL, DLF and Tata Motors among the top Sensex losers

Benchmark share indices ended lower on Monday, amid weak global cues, weighed down by banks as rising inflation dashed hopes of further cuts in key policy rates by the central bank.

The Sensex ended down 77 points at 16,216 and the Nifty ended at 4,908, shedding 21 points.

Meanwhile, the Asian markets ended on a lacklustre note. The Hang Seng slipped 229 points to 19,735, Shanghai was down 14 points at 2,980. However, Nikkei closed higher by 20 points at 8,973.

The European markets also exerted pressure on the domestic markets. CAC40 index is down 66 points at 3,063, DAX has shed 136 points to 6,443 and the FTSE is also down 90 points at 5,485 levels.

Back home, on the macro economic front Inflation moved up to 7.23% in April on account of spurt in prices of vegetables, meat, milk and pulses, although onion and fruits showed a declining trend. Inflation, as measured by the Wholesale Price Index (WPI), was 6.89% in March. In April last year, it was 9.74%.

Rate sensitive sector shares slipped on these concerns. DLF was the top loser among the Sensex stocks, down 3% to Rs 182. Tata Motors, index heavyweight Reliance Industries, HDFC Bank, BHEL, ICICI Bank, Hindalco, ONGC, Tata Steel, State Bank of India, Bharti Airtel and Jindal Steel were also among the top losers, down 0.5-2.4% each.

On the other hand, Larsen & Toubro was the top gainer. The stock ended higher by 2% to Rs 1,159 after the company reported a growth of 13.89% in its standalone net profit at Rs 1,920.41 crore for the quarter ended March 31, 2012, largely on the back of improved order inflows. It reported net profit of Rs 1,686.21 crore during the corresponding quarter last fiscal.

Bajaj Auto, Tata Power, Sun Pharma, Infosys, Cipla, Maruti Suzuki, Mahindra & Mahindra and Wipro were also among the gainers.

Led by losses in the heavyweights such as Reliance Industries and ONGC, the BSE oil & gas index ended lower by nearly 2% to 7,420 levels. Bankex, realty, PSU, power, auto and metal indices also slipped 0.5-1.6% each in trades today. While, healthcare, IT, consumer durables, capital goods, FMCG and teck pockets witnessed some amount of buying and closed in the positive territory.

From the banking space, Bank of Baroda, Yes Bank, Punjab National Bank, IDBI Bank, Union Bank and Kotak Mahindra Bank were among the top losers.

Among the individual stocks, Balaji Telefilms tanked 17% to Rs 37.30 after company’s chief executive officer (CEO) of Television Manuj Agarwal quit the organisation.

Adani Power dipped 3.4% to Rs 50, its new low on reporting a net loss of Rs 290 crore for the fourth quarter ended March 2012, due to higher fuel cost. The Adani Group firm had a net profit of Rs 175 crore in the previous year quarter. Income from operations however, grew 17% at Rs 998 crore on year-on-year basis.

Lupin rallied 4.4% to Rs 544 in otherwise weak market in noon deals, on reports that the drug maker is expected to soon launch its generic version of the anti-HIV drug, Combivir, in the United States.

The broader markets underperformed the benchmark indices. The BSE mid-cap index slipped 60 points to 5,888 and the small-cap index shed 80 points to close at 6,914.

The overall breadth was negative as 1,658 stocks declined while 1,048 stocks advanced.