IIP numbers drag Sensex down by over 200 points

Following global cues, the Sensex is catching up with what happened in the world markets yesterday. The Sensex is trading down by almost 200 points at this hour.

This week has been marked by poor performances in the market, with significantly high volatility. The quarterly performance of companies like Tata Steel, SBI, IOC etc. has further hit the markets. The European debt crisis has taken a toll on capital markets across the globe, and we expect the market to remain volatile today.

To add the fury, the September IIP numbers have come in at 1.9%, as against 4.1% in August 2011 and the street's expectations of 3.1%. This indicates a serious slowdown in economic growth. All eyes will now turn toward the headline inflation data, which is expected shortly.

Back home, apart from Healthcare and Auto, all the sectoral indices are down. Indices from Metal, Banking, Realty and Capital Goods are taking a major beating, and are down by over 2%. Power and PSU are also down by nearly 1.5%. In such a market, Tata Communications has posted a gain of over 5%.

Auto stocks have been lifted by Hero MotoCorp, Bajaj Auto, Mahindra & Mahindra and Tata Motors. IT stocks such as TCS and Wipro are also seen trading in the green. Sun Pharma is the major gainer amongst the Sensex stocks, ahead of its quarterly results on Monday.

As we expected, Tata Steel is trading down by 4.34%, as the company reported dismal numbers. IOC is also down by over 2%, as company has reported an all-time high quarterly loss of Rs 7485 cr for the quarter ended September 30, 2011, in sharp contrast to the Net Profits of Rs 5294 cr last year. Reliance Industries is marginally down after gas production in its KG-D6 fields declined to a one-year low to less than 42 million standard cubic meters per day.

Tech Mahindra and Satyam Computer Services gained, as the management wishes to merge the two companies in the next year. Kingfisher Airlines moved down heavily by 14%, as the company feels the pressure from its suppliers as well as its peers. IRB Infrastructure was marginally up, with the company reporting better numbers than street expectations.
 
In sum, a bad set of numbers have hammered the market, and we expect markets to remain volatile today.