Markets end lower as March IIP disappoints

Sensex and Nifty down over 3% for the week

Markets ended lower on Friday as the disappointing March Index of Industrial Production which contracted by 3.5% raised concerns over economic growth. The Sensex ended lower by 127 points at 16293 while the Nifty shed 37 points at 4929.

For the week the Sensex is down 3.23% and the Nifty lost 3.14%

Earlier in the day, the Sensex dropped to the day's low at 16,234 after March IIP data was released. However in the afternoon trades the markets recovered some of its lost ground on hopes that the RBI would ease key policy rates next month. Gains in index heavyweights like Reliance Industries, Tata Motors and SBI and touched a high of 16,447. Meanwhile, the Nifty saw a high of 4,976 and a low of 4,906.

In the broader markets, the midcap and the smallcap indices ended the day lower by 0.8% each almost in line with the Sensex, down 0.7%.

India's industrial output unexpectedly fell in March for the first time in five months, driven by a slump in the capital goods sector. According to the release, March IIP data was at -3.5% with the capital goods segment contracting the most at -21.3%. Commenting on the numbers, Gokarn said that a sharp contraction in India's industrial output in March reinforces the slowdown trend in the country.

In the international markets, all the Asian markets closed in the red. The Nikkei share average sank below 9,000 for a sixth straight week of losses, with a choppy earnings season. The index closed at 8,953, down 0.6%. Hong Kong shares tumbled for a seventh straight day, after China's April inflation figures were largely in line with estimates, further dousing hopes of near-term easing despite signs of a steeper slowdown. The Hang Seng Index slipped 1.3 percent to 19,965.Kospi and Taiwan were the other notable losers, down 1%.

Following the global cues, the European markets too is trading in the red with FTSE and DAX down 0.3% each while CAC lost 0.6%

Among the sectoral indices, Health Care, Power, FMCG, Metal and IT down 1% were the major laggards today. However, Auto space saw some buying interest post afternoon trades. The index closed up 0.6% at 9,779 and the Bankex index ended flat with a positive bias at 10,836.

Auto majors, Bajaj Auto, Tata Motors up 3% each were the top gainers among the Sensex stocks followed by BHEL, SBI, DLF and Reliance Industries up 0.4-0.8%.

On the losing side were Tata Power, Sun Pharma, Hindalco, Cipla, Coal India, Maruti Suzuki and ITC down 2-5%.

Among individual stocks, Dr Reddy's has dropped over 2% at Rs 1,661 on reporting lower-than-expected fourth quarter numbers. The pharma major saw a marginal increase in consolidated net profit at Rs 343 crore for the quarter ended March 2012.

Textiles and plastics firm Sintex Industries dropped 4%after its consolidated net profit declined by 46.84% to Rs 88.42 crore for the fourth quarter ended March 31, 2012, due to reduction in demand in both domestic as well as international markets.

The market breadth was negative. On the BSE, 1772 stocks declined as compared to 978 advanced.