The Indian stock market opened on a firm note on Monday with investors tracking strong global cues and indulging in some buying. Though the market retreated subsequently, stocks recovered swiftly after data released by the government showed a fall in wholesale price inflation in June.
However, the recovery proved short-lived and the market faltered again, and worse, slipped deeper into the red past mid afternoon to end the day on a dismal note. A waring from the Indian Meteorological Department that monsoon rains will be significantly below normal in July and September and that the El Nino effect which causes temporary variations will likely emerge in August and September.
Weakness in some of the markets in Europe amid lingering worries about the financial situation in that part of the continent, weighed on sentiment to an extent.
The BSE benchmark Sensex, which rose to 17,282.30 after a firm start, plunged to 17,079.63 and eventually ended the day with a loss of 110.39 points or 0.64% at 17,103.31.
The Nifty index of the National Stock Exchange closed at 5197.25, recording a loss of 30 points or 0.57%. The index touched a high of 5246.65 and a low of 5190.45 during the session.
According to the data released by the government today, India's wholesale price index stood at 7.25% in June as against 7.55% in May. The annual inflation rate was at 9.51% during the corresponding month of the previous year.
The official WPI for ‘All Commodities’ for May rose by 0.2% to 164.2 from 163.9 in the preceding month. Build up inflation in the financial year so far was 1.99% compared to a build up of 2.41% in the corresponding period of the previous year.
The Government revised upwards the inflation rate for April to 7.50% from a preliminary estimate of 7.23%. The WPI for April has been revised to 163.5 as compared to a provisional reading of 163.1.
Information technology stocks drifted lower on selling pressure. Sector heavyweights Infosys and Tata Consultancy Services lost 2.4% and 3.15%, respectively. Wipro ended lower by about 1%. Financial Technologies, Oracle Financial Services and Tech Mahindra also ended notably lower.
Metal stocks were among the other prominent losers. Tata Steel ended nearly 4% down. Sesa Goa, Sterlite Industries, Hindalco, Jindal Steel and JSW Steel lost 1.7% - 2.7%. Coal India, NMDC and SAIL also closed weak.
Capital goods sector majors Larsen & Toubro and BHEL lost 1.5% and 0.5%, respectively. Alstom T&D, Bharat Earth Movers, Jindal Saw and Suzlon Energy also closed weak. AIA Engineering, AIL, Crompton Greaves and SKF India surged higher.
Tata Motors lost 2.6% despite the company reporting a 6% surge in global vehicles sales. Tata Power and GAIL India lost 2.2% and 2%, respectively. Bajaj Auto, NTPC, ICICI Bank, HDFC Bank and ITC also ended notably lower.
Bharti Airtel ended with a strong gain of 3.8%. Maruti Suzuki, Dr Reddy's Laboratories, Axis Bank, Bank of Baroda, State Bank of India, Punjab National Bank, Cipla, Ranbaxy Laboratories, Sun Pharmaceutical Industries, HDFC and Power Grid Corporation also closed on a firm note.
Castrol India gained some ground despite the company reporting a drop in earnings. The company's announcement about a bonus proposal triggered buying interest at the counter.
MindTree rose sharply on impressive quarterly results, while disappointing earnings report pushed down AP Paper stock sharply.
The market breadth was weak. Out of 2933 stocks traded on BSE, 1661 stocks declined. 1160 stocks moved up and 112 stocks ended flat.