Sensex closes in the red, down 194 pts

The Sensex closed for the day down 194 points at 18,336 and the Nifty shed 47 points to end at 5,497.
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(Updated at 1436 hrs)
The markets continue to trade in the negative with the Sensex down 201 points at 18,329 while the Nifty shed 52 points at 5,492. In the broader markets, the smallcap index is down 0.8% and the midcap index shed 0.7% as compared to the Sensex losing 1%.

Earlier in the day, tracking weak Asian peers the markets opened lower. The Sensex attempted to move north in the first hour of trade but a bout of weakness ahead of the inflation data saw the rate sensitive realty and banking stocks dragged the markets lower. However, due to the marginal decline in the inflation for the month of April as compared to March the markets recovered losses partially.This receovery turned to be short lived as the BSE benchmark index slipped lower to touch the day's low of 18,333.

According to the inflation data, inflation for the month of April saw a marginal decline at 8.66% versus 9.04% reported in March. WPI primary articles inflation stood at 12.05% versus 12.95% month-on-month, while the WPI fuel group infaltion came in at 13.32% versus 12.92% reported a month ago. Manufacturing product inflation saw a negligible decline to 6.18% versus 6.21% reported in March. However the prospect of rising energy costs will keep pressure on the Reserve Bank of India (RBI) to raise rates in June.

This softening may prove to be a blip as the government aims to raise state-controlled prices of fuels such as diesel and cooking gas, possibly as soon as this week.Earlier, state-run oil refiners had raised petrol prices by about 8.6%, or Rs 5 a litre ($0.11), from Sunday, a record hike that will fuel inflation in Asia's third-largest economy.

Among the sectoral indices, Metal, Bankex, FMCG, Auto and Realty indices down 1% each  are the major draggers in the afternnon trades. On the other hand, Health Care index up 0.6% continues to be only positive index. The movers in this space are Glenmark Pharma up nearly 12% followed by Ranbaxy Lab, Sun Pharma and Lupin adding between 1-2%

Hero Honda up nearly 2%, Bharti Airtel, BHEL gaining 0.7% and TCS adding 0.2% are the only gainers among the sensex- 30 stocks.

Jaiprakash Associates down nearly 3%, Mahindra & Mahindra, Tata Steel, Jindal Steel,     Bajaj Auto, DLF, ONGC and HDFC losing 2% each are the top losers in the afternoon trades.

The market breadth is very negative. Of the total 2798 stocks traded on the BSE, 1719 stocks have declined while 972 advanced.