Sensex recovers from intraday low on IIP data, closes flat

Strong growth in industrial production prevented the markets from ending below the psychological 15,000 level as the benchmark Sensex shed 54 points amid negative FII activity and continued worries about unfavourable rainfall and swine flu.

The Bombay Stock Exchange 30-share index recovered by 340 points from its intra-day low of 14,701 after the government released data showing 7.8 per cent growth in industrial production in June against 2.7 per cent in May.

The Sensex ended the day at 15,020.16, netting a fall of 54.43 points or 0.36 per cent from its previous close.

Bonanza Portfolio Assistant Vice-President Avinash Gupta said, “The bulls and bears showed their strength and shared the honours on Wednesday. The increase of levy on mining companies was the probable cause of discomfort in the market. The market recovered once the information that it impacts only iron ore became public.”

The market witnessed a heavy sell-off in early trade mainly because of growing fears about slower economic growth and lower crop yields after India’s meteorological department gave a bleak monsoon forecast.

Initially, market sentiment was dampened by weak global cues and sustained pullout by foreign investors.

The broader 50-share Nifty of the National Stock Exchange dropped 13.85 points or 0.31 per cent to close at 4,457.50 from its last close.

Among the Asian indices, the Shanghai Composite ended down 4.66 per cent, Hang Seng 3.03 per cent, Nikkei 1.42 per cent and Straits Times 1.00 per cent. European markets were flat in their early trade this afternoon.

Foreign institutional investors pulled out Rs 1,800.30 crore in four days till August 10. India’s largest private sector steel manufacturer, Tata Steel, fell 4.20 per cent following a slide in metal prices on the London Metal Exchange on Tuesday.

Among other major losers, TCS was down 4.11 per cent, HUL 3.32 per cent, Infosys Tech 1.87 per cent, Hindalco 1.85 per cent, ONGC 1.82 per cent and Sterlite 1.76 per cent.

However, Bharti Airtel gained 5.84 per cent, Tata Motors 4.41 per cent, DLF 2.91 per cent, and Sun Pharma 2.73 per cent.

While stocks in IT, metal, oil and gas, bank, capital goods, power and FMCG performed badly, realty, healthcare, auto, consumer durables and teck gained and saved the market from a major fall.