IIP data fails to cheer, Sensex ends over 150 points down

The Sensex closed the session lower by more than 150 points on the back of profit booking, it rallied more than 400 points on Wednesday. The Nifty witnessed supply at the 5,000 mark and closed over 50 points lower. Better-than-expected IIP (Index of Industrial Production) data failed to cheer the markets today.

September IIP came in at 9.1% as against 11% on month-on-month basis and 6% on year-on-year basis (YoY) while CNBC-TV18 expected at 7.14%. Industrial growth for the period April to September increased to 6.5% versus 5%, YoY. FM said 9.1% IIP growth in September was a strong number.

Samiran Chakrabarty, Standard Chartered Bank's Head of Research said,''If one looks at the last three months, on an average we are clocking numbers which are even better than what we did in the peak of industrial boom.'' He maintains the 6.4% GDP number for FY10. Going forward, we will probably look at revising it after this industrial growth numbers."

The benchmark indices were marginally lower since morning trade as they entered into consolidations mode. They managed to recover post IIP data but couldn't hold in the green for long. Indices extended losses in the last one hour of trade and negative global cues also weighed on the markets. European markets were modestly in the red and the US index futures were down 0.5%, at the time of writing this report. Shanghai and Taiwan Weighted were flat while other Asian markets declined 0.5-1.4%.

Banking and financial, metal, realty and select power stocks were seeing selling pressure. Heavyweights Reliance Industries, ITC and Bharti Airtel also exerted pressure. However, buying in technology (up for the second day in a row), capital goods, cement and select telecom stocks capped the losses to major extent.

Jagdish Malkani, Country Head of Taib India said certainly 5,000 &  thereabouts seemed to be fair resistance point. He also said with medium to long-term view one tended to be certainly very conservative.