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By 14:30, Sensex plunged by 51 points at 19,557, and the Nifty down 23 points or 0.39% at 5,909 levels.
On the global front, Japan's Nikkei share average rebounded on Thursday as investors flocked to companies posting rosy earnings such as brewer Asahi Group Holdings , but profit-taking in financials limited gains and pulled down the broader Topix index. The Nikkei gained 0.5 percent to 11,307.28. That is 1.7 percent below the 33-month high of 11,498.42 hit on Feb. 6.
Back home, the headline inflation rate moderated to its lowest level in more than three years in January, helped by a slower rise in fuel and manufactured goods prices, which could give policymakers more leeway to revive a slowing economy.
Wholesale prices -- India's main inflation gauge -- rose 6.62% in January from a year earlier, the slowest pace since November 2009 and below the 7.0% annual rise predicted by economists in a Reuters poll. Headline inflation stood at 7.18% in December.
Prime Minister's key economic advisor C Rangarajan today hoped that inflation will come down to 6.5% by end-March and suggested that steps should be taken to release more food stocks to ease price pressure.
On the sectoral front, BSE Capital Goods index has slumped by almost 2% followed by counters like Power, Auto, Consumer Durable, Healthcare, Realty and Oil & Gas, all declining by 1% each. However, BSE IT and FMCG indices are trading in positive zone.
Auto space has declined as media reports that petrol and diesel prices are likely to be hiked this week and muted auto sales volumes. Tata Motors is down by 3% ahead of the third quarter results which are due later in the day today as last month, the company’s highly profitable UK-based subsidiary, Jaguar Land Rover, said that EBITDA for December quarter is likely to be slightly lower than in the previous two quarters.
Maruti Suzuki has slipped nearly 2.5% after MSCI said it will remove the auto maker from its MSCI India index as of the close of trade on February 28.
Hero Moto is down by nearly 2%.
Bharti Airtel is the top Sensex loser, down over 3%. Shares of mobile phone companies are under pressure on the bourses in late morning deals on reports that the government has demanding additional revenue share for spectrum usage.
SBI is down by almost 2% after posting a marginal 4% rise in net profit for third quarter ended December 2012 at Rs 3,396 crore.
Wipro is down by nearly 3% after NSE has decided to exclude these companies from its benchmark index Nifty from April 1.
Index heavyweight RIL has slipped over 1%. RIL is not obliged to provide past yr documents to CAG. The company said it is not obliged to provide full access to documents relating to years that are not under audit.
Other notable losers include Wipro, Cipla, DRL, Sterlite and ICICI Bank.
On the gaining side, HUL, HDFC Bank, GAIL, TCS and ONGC have surged between 1-2%.
Media stocks were under pressure in today's trade as a report put out by India Ratings has a negative outlook for the media & entertainment (M&E) sector for H113, as moderate economic growth and cost reduction initiatives by corporates are leading to sluggish growth in advertising spending (ad-spend).
The top losers from the media space in the noon deals were TV18 Broadcast which slumped 13%, Network 18 Media lost 6% followed by Dish TV, Fame India, NDTV, Reliance Broadcast, TV Today Network all down 3-4%.
The broader indices continue to underperform the benchmark indices. BSE Midcap and Smallcap indices are down by over 1% each.
The market breadth in BSE remains unhealthy with 1,656 shares declining and 662 shares advancing.
