Nifty stays below 5350 as IIP contracts; Bharti, Cairn fall
Posted: Thu Aug 09, 2012 2:13 am
Indian shares turned choppy as disappointing factory output data weighed on sentiments. The contraction in industrial output, which accounts for nearly 15 per cent of India's GDP, confirmed the slowdown in the economy.
At 12.50 p.m., the Sensex traded 12 points lower at 17,589 while the broader Nifty index traded 5 points lower at 5,333.
The factory output contracted to -1.8 per cent against estimates of a flat growth. The decline in IIP was partly on account of the high base effect.
"-1.8 per cent has to be read in terms of significant base effect. Capital goods are clearly the significant driver in terms of taking the growth in the negative territory... even sequentially the momentum has been slowing," Dr. Shubhada Rao, chief economist at YES Bank.
Manufacturing, which constitutes about 76 per cent of industrial production, shrank an annual 3.2 per cent from a year earlier. Capital goods, a key investment indicator, slumped nearly 28 per cent in June.
Cap good stocks were the biggest underperformer on the BSE. Engineering major Siemens was among the top Nifty losers, down 2 per cent. Power equipment manufacturer BHEL extended losses and traded 1 per cent lower. Engineering and construction major L&T was down 0.8 per cent.
The BSE oil and gas index also traded lower on account of sharp cut in Cairn India, which was down 2.6 per cent. The stock fell after its CEO Rahul Dhir resigned.
Bharti Airtel, India's biggest mobile carrier, extended losses and was the top Nifty loser for a second day. The company had posted a decline in profit for the 10th straight quarter yesterday. The stock traded 4.5 per cent lower.
Tata Motors also traded lower ahead of reporting June quarter earnings later today. Financials like HDFC and SBI also saw selling pressure.
Vedanta group firm Sterlite Industries was the top Nifty gainer, up 3.2 per cent. Utility vehicle manufacturer M&M gained for a second day and traded 3 per cent higher. The company beat estimates and posted a rise in profit yesterday. Coal India shares advanced 2.3 per cent.
24 of the 50 stocks traded higher on the Nifty index. On the broader BSE 500 index, only 39 per cent stocks traded higher, indicating a weak breadth.
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At 12.50 p.m., the Sensex traded 12 points lower at 17,589 while the broader Nifty index traded 5 points lower at 5,333.
The factory output contracted to -1.8 per cent against estimates of a flat growth. The decline in IIP was partly on account of the high base effect.
"-1.8 per cent has to be read in terms of significant base effect. Capital goods are clearly the significant driver in terms of taking the growth in the negative territory... even sequentially the momentum has been slowing," Dr. Shubhada Rao, chief economist at YES Bank.
Manufacturing, which constitutes about 76 per cent of industrial production, shrank an annual 3.2 per cent from a year earlier. Capital goods, a key investment indicator, slumped nearly 28 per cent in June.
Cap good stocks were the biggest underperformer on the BSE. Engineering major Siemens was among the top Nifty losers, down 2 per cent. Power equipment manufacturer BHEL extended losses and traded 1 per cent lower. Engineering and construction major L&T was down 0.8 per cent.
The BSE oil and gas index also traded lower on account of sharp cut in Cairn India, which was down 2.6 per cent. The stock fell after its CEO Rahul Dhir resigned.
Bharti Airtel, India's biggest mobile carrier, extended losses and was the top Nifty loser for a second day. The company had posted a decline in profit for the 10th straight quarter yesterday. The stock traded 4.5 per cent lower.
Tata Motors also traded lower ahead of reporting June quarter earnings later today. Financials like HDFC and SBI also saw selling pressure.
Vedanta group firm Sterlite Industries was the top Nifty gainer, up 3.2 per cent. Utility vehicle manufacturer M&M gained for a second day and traded 3 per cent higher. The company beat estimates and posted a rise in profit yesterday. Coal India shares advanced 2.3 per cent.
24 of the 50 stocks traded higher on the Nifty index. On the broader BSE 500 index, only 39 per cent stocks traded higher, indicating a weak breadth.
visit: www.daygains.com for Share Market Tips / Share Tips