Weak IIP dents markets, Sensex down 260pts

The markets are under intense selling pressure after the government announced weak set of IIP numbers. The Sensex has dipped near its day's lows, down 266 points to 15,945, and the S&P CNX Nifty has dipped 80 points below 4,800 levels to 4,787. The markets had opened higher, but soon erased all their gains.

The index of industrial production for October was -5.1% versus 11.3% during the same period previous year. The manufacturing output came in at -6% on a year-on-year basis.

According to Hormuz Maloo, Technical Analyst, Geojit BNP Paribas Securities, "The first support level for the Nifty seems to be the recent low at 4639 points. Long term resistance remain at around 5200-5250 levels."

Hindalco is the top loser among the Sensex stocks, down 3.4% to Rs 127. Tata Power, J P Associates, Larsen & Toubro, Bajaj Auto, SBI, NTPC, Mahindra & Mahindra, Bharti Airtel, BHEL and Reliance Industries are also trading lower by 1.8-3.2% each.

On the other hand, Wipro, TCS, Infosys, ONGC and Sun Pharma are among the notable gainers.

Among individual stocks, Capital goods companies are under pressure on the bourses as the country’s industrial production (IIP) shrunk in October for the first time in more than two years.

Jain Irrigation Systems has slipped 4.4% to Rs 110, after the company reported that a major fire broke out in its plastic pipe stocking yard located at Jalgaon in Maharashtra.

Kinetic Motor Company Ltd (KMCL) has rallied 10% to Rs 16.30 after the board of directors approved the merger of the company with Kinetic Engineering Ltd (KEL) in the swap ratio of 31 shares of KMCL for every four of KEL.

Selling is visible across the board barring IT stocks. Capital Goods stocks are amongst the worst hit. The BSE Capital Goods index is the top sectoral loser, down 2.1% to 9,198. Metal index is down 199 points at 10,220. Power, Bankex, Auto, PSU, Consumer Durables, Oil & Gas and Healthcare indices have also shed 0.5-1.8% each in trades thus far.

From the capital goods space, Punj Lloyd is the top loser, down 4% to Rs 46. Crompton Greaves, BEML, Usha Martin, Lakshmi Machine Works, SKF India, L&T, Suzlon and BGR Energy have also shed 2.5-3% each. Among the metal stocks, Hindalco is the top loser. It is followed by JSW Steel, SAIL, Coal India, Bhushan Steel and Sesa Goa.

The mid-cap and small-cap indices are also down nearly 1% each.

The overall market breadth is extremely negative as 1,652 stocks are declining while 786 are advancing.