Nifty closes below 4600; telecom, infra, financials drag

12 June 2009

It was another profit booking day for the benchmark indices. Selling was seen in infrastructure (capital goods + power), telecom, realty, auto, financials and technology counters. The sell-off was seen because of unwinding of long positions ahead of the weekend. The markets witnessed volatility throughout the session and ended lower.

The IIP (Index of Industrial Production) data was encouraging as it came in at 1.4% for the month of April as against negative 0.7% in March but 1.3% contraction in output of capital goods exerted pressure on the markets in the later part of the day. Both the indices were in a positive terrain for first part of the day. Finally after struggling, the Nifty closed below the 4600 mark.

Sonal Varma of Nomura Financial said the positive IIP number was a pleasant surprise. Varma said industrial output would improve ahead. ''We see stabilization in the second quarter and a slight pickup in the third quarter of 2009 and a more durable pickup from the October-December quarter onwards,'' Varma said, adding that as a result of the bottoming out that has happened, the chances of the Reserve Bank of India (RBI) cutting rates this year to boost growth looked slim.

The 30-share BSE Sensex closed 173.53 points or 1.13% lower at 15,237.94, after seeing an intraday high of 15,600.30 and low of 15,174.28. The 50-share NSE Nifty touched a high/low of 4693.20 and 4566.15, before closing at 4583.40, down 1.17% or 54.30 points.

Bharti, DLF, SBI, NTPC, Reliance Communication, BHEL, L&T, Wipro, HDFC, SAIL, Infosys, ICICI Bank and HDFC Bank dragged the frontline indices while buying in Reliance Industries, Reliance Petroleum, ONGC, Tata Steel, Sterlite and Nalco capped the losses.

Sectoral indices