Markets have completely shocked and taken huge beating on account of disappointing IIP numbers, rising inflation, crude and no revision in Infosys' guidance in dollar terms. Huge sell off seen in technology, capital goods, power, oil, banking and metal stocks. Global cues have not played any big role in today's session. All BSE indices ended in red.

The Sensex fell 574.9 points and Nifty 147.75 points to hit intraday low of 13,351.34 and 4014.45, respectively. Sensex closed with a loss of 456.39 points or 3.28% at 13,469.85. Nifty closed at 4049.00, down by 113.2 points or 2.72%.

Nifty Futures discount ended at 20 pts; discount widened to 50 points post IIP numbers. Nifty futures added 48.5 lakh shares versus 22 lakh shares pre IIP. Nifty Mini witnessed hectic activity; 4th highest turnover seen at Rs 6656 crore after RIL, Infosys, Reliance Capital. Fresh shorts have seen in tech and capital goods stocks.

Infosys, L&T, HDFC, ICICI Bank, Satyam, Reliance Industries, ONGC and TCS were biggest draggers for indices.

Growth in Index of Industrial Production (IIP) of May has declined at 3.8% as against 10.6% in same period of last year, which is below expectations. May Manufacturing growth was also down at 3.9% from 11.3% (YoY) and Capital Goods at 2.5% versus 22.4%.

According to the Arvind Virmani, Chief Economic Advisor, Finance Ministry (CEA), IIP numbers are a cause for concern. He is of the view that the Finance Ministry may revise growth forecast for FY09 down to around 8%. Inflation is due to external shock of crude, global metal price. He believes that it is difficult to predict inflation due to volatile crude prices and expects inflation to come down between 5-6% in one year.

Standard & Poor's reports that India's political problems are hurting fiscal discipline. It feels that India must address fiscal problems to avoid a downgrade. It said that India's rating might be low if credit problems persist.

Inflation has been inching up and showing no signs of cooling off. Inflation for the week ended June 28 stood at 11.89% as against 11.63% for earlier week. For week ended May 3, it revised to 8.73% from 7.83% earlier.

One of largest banks, PNB sees inflation in double digits for 6 months till wholesale price index (WPI) remains high and says cannot rule out CRR, repo rate hike.

Multinational bank, ABN AMRO says GDP growth is seen at 7.5-7.6%. Firm feels that inflation pressure will strengthen and sees 50 bps repo rate hike.

Amongst frontliners, Jaiprakash Associates plunged 8.48%, BPCL -8.43%, TCS -8.03%, Satyam -7.19% and Infosys -7.18% while NALCO was up by 5.62%, Ambuja Cements 1.90%, Sterlite Ind 1.54%, Cairn India 1.36%, HDFC Bank 1.21%, Hindalco 1.01% and Bharti Airtel 0.44%.

IT bellwether, Infosys Technologies has posted good numbers for the quarter ended June 2008 but guidance in dollar terms failed to make markets happy. The company has reported 4.24% growth in its Q1 consolidated net profit of Rs 1,302 crore as against Rs 1,249 crore in previous quarter and 6.87% growth in net sales at Rs 4,854 crore versus Rs 4,542 crore QoQ. FY09 revenues guidance revised to Rs 21,278-21,622 crore while dollar revenue guidance maintained at USD 4.97-5.05 billion, which led down the markets. Infosys closed at Rs 1,676.45, down 7.18%.

Technology stocks like I-Flex Solution, TCS, Satyam, Infosys, Tech Mahindra, Wipro, Aptech and HCL Tech crashed 4-9%. Index fell by 281.77 points or 6.73% at 3,907.63.

Capital Goods Index was down 565.67 points or 4.99% at 10,774.38 due to selling in Gammon India, L&T, Astra Microwave, Punj Lloyd, Alstom Projects, ABB, Bharat Bijlee, BEML, Alfa Laval and BHEL. These stocks fell 3-7.5%.

Power stocks also lost ground, which include GMR Infra, Tata Power, Reliance Infra, Reliance Power, GVK Power, Lanco Infratech, Power Grid Corp, Torrent Power, Neyveli Lignite. These stocks crashed 4-7.5%. Index lost 104.72 or 4.28% at 2,344.06.

Oil & Gas Index ended with a loss of 193.31 points or 2.13% at 8,886.28 on the back of selling in BPCL, Essar Oil, IOC, RNRL, ONGC, HPCL, GAIL, Petronet LNG and Reliance Ind.

Crude has hit all-time high of USD 145.98 per barrel on the NYMEX.

FMCG stocks like United Spirits, ITC, Tata Tea, Godrej Consumer, Marico and HUL have plunged. Index tumbled 2.09% at 1,987.28.

BSE Bankex lost 120.49 points or 1.95% at 6,044.76 as selling seen in IndusInd Bank, Oriental Bank, ICICI Bank, Union Bank, Bank of India, Allahabad Bank, IOB, Yes Bank and Kotak Mahindra.

Metal stocks ended with a loss of 2-6.5%, which include Ispat Industries, Tata Steel, NMDC, JSW Steel, Jindal Steel, SAIL, Hind Zinc and Sesa Goa. Index fell 247.46 points or 1.91% at 12,711.71

Realty stocks also collapsed. This includes Omaxe, Parsvnath, Orbit Corporation, Sobha Developer, Akruti City, Peninsula Land, Anant Raj Ind, HDIL and Unitech, which lost 2-7.5%. Index plunged 1.56% at 4,800.09.

Auto Index finished down by 1.02% at 3,529.44 due to weakness in Exide Industries, Hero Honda, Escorts, Ashok Leyland, Amtek Auto, M&M, MRF and Maruti Suzuki.

Pharma stocks like Aurobindo Pharma, Divis Labs, GSK Pharma, Sterling Bio, Ipca Labs, Matrix Lab, Orchid Chemical, Wockhardt, Ranbaxy Labs and Dr Reddy's Labs were down. Index fell 0.6% at 4,129.94.

Midcap Index crashed 2.01% at 5,365.34 and Small Cap index lost 1.4% at 6,713.66. Amongst midcap stocks, Deccan Aviation, IFCI, Nagarjuna Const, Gammon India, Omaxe, BL Kashyap and SpiceJet lost 7-10%.

In the small cap segment, Varun Industries, Sparsh BPO Svcs, Force Motors, Ferro Alloys, Garden Silk, BPL, Mukand, Vipul and KPIT Cummins tumbled 8-9.7%

Most active counters on the bourses were Infosys, Reliance Ind, Reliance Infra, L&T and BHEL.

Market breadth was weak; about 1112 shares have advanced while 1810 shares declined. Nearly 223 shares remained unchanged.

Turnover traded in the markets stood at Rs 67,781.21 crore. This includes Rs 12,259.08 crore from NSE Cash segment, Rs 50,149.82 crore from NSE F&O and Rs 5,372.31 crore from BSE Cash segment.

Asian markets were trading higher. Nikkei was up 0.3%, Straits Times 1.05%, Kospi 1.45%, Taiwan Weighted 1.9% and Hang Seng 1.4%. However, Jakarta fell 0.2%.