Markets drop on weak Dec PMI

Benchmark indices down over 1% as bluechips crack on profit taking

Markets slipped for the second consecutive day with the benchmark indices losing over 1% each in the second half of the trading session as profit booking emerged at higher levels.

Both the benchmark indices – Sensex and Nifty- gave off their key levels of 21,000 and 6,300 levels respectively.

At close, the Sensex was down 252 points or 1.2% at 20,888 and the Nifty dipped 80 points or1.3% at 6,221.

Even the broader markets buckled under the selling pressure. The midcap index lost 1.8% and the smallcap index dropped 2% after a stellar run over the last few trading sessions.

The downward spiral come in the wake of news that India's manufacturing sector ended the year 2013 on a bit of pessimistic note as growth fell in December against the previous month, showed the widely-tracked HSBC purchasing managers' index (PMI). However, consumer segment of the manufacturing, which had faced the heat of slow down, showed some signs of uptick.

The PMI was down at 50.7 points in December from 51.3 in the previous month. This is the second month in a row when manufacturing activities registered a growth after falling since August. A reading above 50 points shows a growth, while the one below is a contraction.

Rupee

The rupee is off its highs as a large petrochemical company bought dollars, dealers say. The pair is 62.06 versus Wednesday's close of 61.90/91 after dropping to 61.74

Global Markets

Asian share markets endured mixed fortunes on Monday in the wake of disappointing data on Chinese manufacturing, while investors showed renewed appetite for commodities as the New Year got underway.

Japan's Nikkei was closed on Thursday but ended 2013 with an annual gain of 57%.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5% on Thursday.

The relentless drop in the yen has also been eroding the competitiveness of Japan's Asian neighbours, one reason Korean shares skidded 2.2% on Thursday.

Not helping was a drop in China's official Purchasing Managers' Index (PMI) to 51.0 in December, from 51.4 the previous month and below forecasts for 51.2.

Markets in Europe too were weak with CAC, DAX and FTSE down 0.4-0.8%.

Sectors and Stocks

Barring the IT index which was down 0.1%, all the other sectoral indices closed in the negative territory.

Realty index down 3% was the top loser followed by Capital Goods, Power, Bankex, FMCG and Oil & Gas indices down 2% each.

IT majors TCS, Infosys were up 0.4% and 0.2% respectively. Wipro was flat with a positive bias.

Maruti Suzuki and Sun Pharma up 0.3% each rounded off the gainers among the Sensex-30.

BHEL, Tata Power, Coal india, L&T and Bharti Airtel down 3-3.5%  were the draggers among Sensex-30.

FMCG heavyweights, Hindustan Unilever and ITC were down 1.5-2%.

Oil & Gas majors, ONGC, RIL and Gail India gave off 1.3-2.4%.

From the auto space, Tata Motors, Bajaj Auto, Hero MotoCorp and Mahindra & Mahindra gave off 0.3-1.2%.

Axis bank, ICICI Bank and HDFC Bank down 1.2-2% were the other major losers among the banks.

In individual stocks, Zyden Gentec was locked in lower circuit for eight straight day, down 5% at Rs 15.25 on the BSE, after the Punjab National Bank offloaded around one-third of its holding in the company via open market.

Ricoh India was locked in upper circuit of 5% at Rs 137 after the company fixed the delisting price, at which the promoter may be willing to accept the equity shares tendered in the delisting offer.

Pratibha Industries was up 6% to Rs 28.65 after the company said it has secured construction orders aggregating to Rs 590 crore.

The market breadth was negative on the BSE. 1,564 stocks declined while 1,038 stocks advanced.