Benchmark indices ended lower on Thursday, shrugging off better-than-expected Jan WPI, amid profit booking in auto, financials and index heavyweight Reliance Inds.
The 30-share Sensex ended at 19,497 down 111 points or 0.57% and the 50-share Nifty ended at 5,897 down by 36 points or 0.61%.
The Sensex and the Nifty touched an intra-day low of 19,444 levels and 5,885 mark, respectively.
On the global front, euro dropped and European shares fell on Thursday as growth data from the region's two largest economies came in weaker than forecast, throwing a first quarter recovery for the bloc into doubt.
Japan's Nikkei share average rebounded on Thursday as investors flocked to companies posting rosy earnings such as brewer Asahi Group Holdings , but profit-taking in financials limited gains and pulled down the broader Topix index. The Nikkei gained 0.5 percent to 11,307.28. That is 1.7 percent below the 33-month high of 11,498.42 hit on Feb. 6.
Back home, the headline inflation rate moderated to its lowest level in more than three years in January, helped by a slower rise in fuel and manufactured goods prices, which could give policymakers more leeway to revive a slowing economy.
Wholesale prices --India's main inflation gauge -- rose 6.62% in January from a year earlier, the slowest pace since November 2009 and below the 7.0% annual rise predicted by economists in a Reuters poll. Headline inflation stood at 7.18% in December.
Prime Minister's key economic advisor C Rangarajan today hoped that inflation will come down to 6.5% by end-March and suggested that steps should be taken to release more food stocks to ease price pressure.
On the sectoral front, BSE Capital Goods, Oil & Gas and Auto indices slumped between 1.5-2% followed by counters like Power, Realty, Consumer Durable, Healthcare, PSU, Banks and TECk, all declining by 1% each. However, BSE IT, Metal and FMCG indices ended marginally positive.
Auto space declined as media reports that petrol and diesel prices are likely to be hiked this week and on account of muted auto sales volumes. Tata Motors was down by almost 3%. Tata Motors slipped into a net loss of Rs 458 crore for the quarter ended December 2012. It reported a net profit of Rs 174 crore in the same period a year ago.
Maruti Suzuki slipped over 3% after MSCI said it will remove the auto maker from its MSCI India index as of the close of trade on February 28. Hero Moto was down by over 1%.
In the capital goods sector, majors like L&T and BHEL slipped between 1-3% after recent data showed contraction in industrial output.
Bharti Airtel was the top Sensex loser, down 4%. Shares of mobile phone companies were under pressure on reports that the government has demanding additional revenue share for spectrum usage.
From the banking and financial segment, SBI was down by almost 2% after posting a marginal 4% rise in net profit for third quarter ended December 2012 at Rs 3,396 crore. ICICI Bank and HDFC declined between 1-2%.
Wipro slipped by over 3% after NSE has decided to exclude these companies from its benchmark index Nifty from April 1.
Index heavyweight RIL declined almost 3%. RIL is not obliged to provide past yr documents to CAG. The company said it is not obliged to provide full access to documents relating to years that are not under audit.
Other notable losers include Cipla, DRL, Sterlite and ONGC.
Among other shares, Media stocks were under pressure in today's trade as a report put out by India Ratings has a negative outlook for the media & entertainment (M&E) sector for H113, as moderate economic growth and cost reduction initiatives by corporates are leading to sluggish growth in advertising spending (ad-spend).
The top losers from the media space in the noon deals were TV18 Broadcast which slumped 13%, Network 18 Media lost 6% followed by Dish TV, Fame India, NDTV, Reliance Broadcast, TV Today Network all down 3-4%.
The broader indices continue to underperform the benchmark indices. BSE Midcap and Smallcap indices were down between 1-2%.
The market breadth in BSE ended unhealthy with 1,475 shares declining and 649 shares advancing.