Market shrugs IIP; Sensex ends 300 points down

The Satyam debacle has helped the bears tighten their grip on the equity market so tight that in the past four sessions, the Bombay Stock Exchange’s Sensex has lost over 1,200 points. On Monday, equities ended sharply lower on poor global economic health and ahead of Infosys Q3 results.

Stocks opened gap-down after Asian markets declined on poor economic data from the US. Foreign institutions and traders dumped index heavy weights pulling the benchmarks lower.

Market also discounted positive Index of Industrial Production numbers which grew 2.4 per cent in November compared to a degrowth of 0.4 per cent in October. Every pull-back in the day was met by profit booking.

“Sentiments have turned bearish ever since FIIs began selling after corporate governance issues emerged. After such a sharp fall, we feel there may be some consolidation. We may see stock specific reactions based on earnings beginning with Infosys Technologies Tuesday,” said U R Rao, head of research, ULJK Securities.

The Sensex closed at 9110.05, down 296.42 points or 3.15 per cent from Friday’s close. It touched a high of 9331.13 and low of 9024.45 intraday.

National Stock Exchange’s Nifty ended at 2773.10, down 99.90 points or 3.48 per cent. The broader index touched a low of 2748.55 and high of 2869.20 during the day.

BSE Midcap Index ended down 2.27 per cent and BSE Smallcap Index declined 1.70 per cent.

Reliance pack shares (both Mukesh and Anil Ambani) saw heavy selling and metals stocks lost ground as base metal prices fell in the international market.

All the sectoral indices ended in the red with metals, realty and IT under heavy selling pressure. BSE Metal Index fell 5.62 per cent, BSE Realty slipped 4.87 per cent, BSE IT declined 3.80 per cent and BSE Power was down 3.67 per cent.

Wipro (-9.30%), Reliance Infrastructure (-6.94%), Tata Steel (-6.62%), Ranbaxy Laboratories (-5.46%) and DLF (-5.45%) were the top Sensex losers.

Infosys, which will kick start India Inc earnings season Tuesday, ended 3.22 per cent lower. “Infosys results will set the trend for the results season. With bad news coming from Wipro and Satyam, investors will be left with less option to invest in IT majors. Irrespective of quarterly performance, the scrip may witness profit booking, which has been the trend recently,” Rao added.

Wipro fell early in the day after the company disclosed that the World Bank, in June 2007, had termed the company ineligible for the bank's direct contracts up to 2011 citing conflict of interest policy.

Satyam Computers surged on the government appointing HDFC chief Deepak Parekh, IT expert Kiran Karnik and former SEBI member C Achuthan on the company’s board. On NSE the stock closed at Rs 34.40, up 44.84 per cent. It touched a high of Rs 39.90 and low of Rs 28.50.

Sun Pharmaceuticals (2%) and Jaiprakash Associates (1.02%) were the only gainers.

Market breadth was negative on the BSE with 1,613 declines and 824 advances.

European markets were in the red as shares of oil companies declined after crude oil slipped below $40 per barrel. Meanwhile, US stock futures were down after fall in monthly jobs rose fears of economic turmoil. Dow Jones stock futures were down 0.11 per cent and S&P 500 futures slipped 0.25 per cent.