Indian markets slip on dismal IIP numbers

The Indian markets slipped on the back of poor IIP numbers, which came down to a negative 5.1%, and lost their morning gains that were triggered by positive Asian markets. The Sensex and Nifty were both trading down by 1.71% and 1.67% respectively. Sensex heavyweights like Reliance Industries and BHEL were trading down by 1.96% and 2.63% respectively.

The Asian markets also came off their morning high, with investors worried about the cautionary note interfering in the latest plan to fix Europe's debt crisis. Negative opening in the European markets further dented investor sentiment.

European markets opened negatively ahead of the bond sale by Italy and France. Both the countries are preparing to sell a combined 13.5 billion Euros (or US$ 18 billion) worth of short-term debt today.

Among the BSE sectoral indices, all the indices barring IT have taken a sound thrashing. Metals, Consumer Goods and Power were at the receiving end of most of the beating, each down by nearly 2.3%. CD, Oil & Gas, Bankex, PSU and Auto were also trading down between 1-1.8%.

Back home, all the Sensex shares were trading in the red zone. Tata Power, Bharti Airtel and JP Associates crashed by 3% each. Others like Bajaj Auto, Coal India, Jindal Steel, L&T, SBI, ICICI and Tata Steel dropped between 1.5-2.5%. This was due to concerns over the lower IIP numbers, which indicates a slowdown in domestic consumption and lower economic growth.

The market breadth, which indicates the overall health of the market, is extremely weak. On the BSE, 1736 shares fell, 759 shares rose and 122 shares remained unchanged.

We expect the markets to remain negative for the rest of the day, and advise readers to play with caution.