Despite a positive start, the Indian stock market ended notably lower on Thursday as investors pressed sales in afternoon trades, amid doubts about a rate cut in the near future and on worries about the looming U.S. fiscal cliff. A weak start in European markets, some negative news on a few front line stocks and profit taking after recent sharp gains too contributed to the negative close.
FMCG, consumer durables and realty stocks ended sharply lower. Several stocks from metal, capital goods, power and PSU sections too closed with notable losses.
Healthcare and bank stocks found some support but failed to hold at higher levels. Information technology stocks too closed on a subdued note. Automobile and oil stocks saw some good spells during the day.
The BSE benchmark Sensex, which surged to 19,421.72 in early trades, tumbled to 19,196.75 past mid afternoon and finally ended the day with a loss of 126 points or 0.65% at 19,229.26. The Nifty index of the National Stock Exchange closed at 5851.50, recording a loss of 36.50 points or 0.62%.
After starting off on a fairly steady note, midcap and smallcap stocks retreated and lost significant ground as the session progressed. The BSE Midcap and Smallcap indices ended lower by 1.16% and 0.97%, respectively.
FMCG heavyweight ITC ended lower by over 3.5% following FTSE lowering its free float weighting for the cigarette maker in its global equity index series.
Hindustan Unilever regained some lost ground, but still ended the day lower by almost 2%. The stock tumbled amid reports that Unilever's Indonesian subsidiary has agreed to pay a higher royalty payment to Unilever Plc.
Sterlite Industries lost around 3.2%. Hindalco ended lower by about 2%, Tata Steel lost 1.7% and Coal India ended lower by a little over half a percent. Sesa Goa ended 3.4% down and JSW Steel lost 2.4%, while SAIL eased by over 1%.
Pharmaceuticals stocks Cipla (down 2.1%), Dr Reddy's Laboratories (down 1.1%) and Sun Pharmaceutical Industries (down nearly a percent) also closed notably lower. Divi's Laboratories, Aurobindo Pharma, Opto Circuits and Wockhardt also declined sharply.
Capital goods heavyweights BHEL and Larsen & Toubro lost 1.8% and 1.3%, respectively. Punj Lloyd, Crompton Greaves, Jindal Saw, Welcorp, AIL, Bharat Earth Movers, AIA Engineering and Praj Industries were among the other notable losers in the capital goods space.
NTPC, State Bank of India, Mahindra & Mahindra, Infosys, HDFC, Hero Motocorp and Tata Power also closed weak.
Reliance Infrastructure, Jaiprakash Associates, IDFC, Ambuja Cements, ACC, Grasim Industries, Kotak Bank and BPCL ended on a weak note.
Tata Motors moved up by nearly 4% on sustained buying at the counter following the company's UK subsidiary Jaguar Land Rover reporting a record sales of 29,893 vehicles in the month of November.
Jindal Steel & Power, Bharti Airtel and Bajaj Auto gained 1.3% - 1.8%. ICICI Bank notched up a gain of 0.8%. Power Grid Corporation, Siemens, Cairn India, HCL Technologies and Lupin posted modest gains, while Ultratech Cement, ONGC and Reliance Industries edged up marginally.
NMDC had a good spell in positive territory following the government's stake sale offer in the stock receiving a good response from investors. Honeywell Automation, Puravankara Projects and SREI Infrastructue attracte buyers on stock specific news.
The market breadth was weak. Out of 3060 stocks traded on BSE, 1834 stocks declined. 1106 stocks moved up and 120 stocks ended flat.