The stock markets ended lower on Friday, amid weak European cues, after lower-than-expected industrial production for December 2011 weighed on market sentiment.
The Sensex ended at 17,749, down 82 points and the 50 share Nifty ended lower by 31 points at 5,382 levels.
On the global front, Asian markets ended weak barring Shanghai Composite. European shares were down 0.5-1% as concerns over Greek debt default persisted after finance ministers of the euro zone set more conditions for Greece to secure a second bailout following a deal by Greek leaders on reforms.
Industrial production grew by just 1.8% year-on-year in December 2011 due to contraction in mining and capital goods sectors and a lower manufacturing sector growth. Factory output growth, as measured by the Index of Industrial Production (IIP), was at 8.1% in December 2011.
Output of the manufacturing sector, which constitutes over 75% of the index, rose at a low rate of 1.8% in December, compared to growth of 8.7% during the same period previous year, according to the official data released today.
Ananlyst believe that the numbers were below expectations. According to Madan Sabnavis, Chief economist, Care Ratings, Mumbai, "The numbers have turned out to be a big disappointment, and are far below our expectations."
"The major concern is whether we can recoup this loss in the next three months to meet the fiscal year target, given that we will be encountering a high base effect in January to March.
"It will be a big challenge," adds Sabnavis.
Back to markets, Hindalco was the top loser among the Sensex stocks.
The stock extended its yesterday's fall and closed lower by nearly 4% at Rs 153.
Maruti Suzuki also shed 2% to end at Rs 1,245.
Index heavyweight Reliance Industries also slipped 1.2% to Rs 842. Mahiundra & Mahindra, ICICI Bank, Hindustan Unilever, Hero MotoCorp, HDFC Bank, DLF, Infosys, GAIL India, Cipla and Tata Power were also among the laggards in trades today.
However, Tata Steel bucked the weak trend and ended at Rs 475 higher by 5.3%, bouncing back 10% from day's low level of Rs 432, after the company's managing director HM Nerurkar said that an improvement in operating performance, coupled with a number of new marketing initiatives, should increase profitability at the South East Asian operations.
Bajaj Auto, Wipro, TCS, ITC and Jindal Steel were also among the notable gainers.
BSE Realty index was the top sectoral loser.
The index slipped nearly 1% or 18 points to shut shop at 1,887 levels.
Anant Raj Industries was the top realty sector loser, down 3.4% to Rs 69. Oberoi Realty, Unitech, Phoenix Mills, Godrej Properties and Sobha Developers also ended in the red, down 1.6-2.2% each.
Led by losses in frontline oil & gas sector stocks like Reliance Industries, GAIL India and Cairn India the oil and gas index ended lower by 0.8% or 71 points at 8,770.
Banking stocks also witnessed profit booking today.
The BSE banking index- Bankex slipped 0.7% or 45 points to 11,987 levels. Axis bank was the top loser from this sector, down 1.5% to close at Rs 1,117.
Union Bank, Bank of India, ICICI Bank, HDFC Bank, Kotak Mahindra Bank and State Bank of India ended on a weak note.
Healthcare, Power, Capital Goods, Consumer Durables, IT, Auto, FMCG and PSU stocks also faced a bit of selling pressure in trades today and the respective indices ended lower by 0.1-0.7% each.
Selective buying was visible in some metal counters such as Tata Steel, SAIL, Sesa Goa and Jindal Steel.
The BSE metal index advanced 0.6% or 71 points to close at 12,364 levels.
Among the individual shares, Hindustan Petroleum Corporation rallied 2.2% to end at Rs 294 on reporting 13-fold increase in net profit at Rs 2,725 crore for the quarter ended December 2011 on receiving government subsidy on fuel sales for the previous two quarters.
The state-owned oil marketing company had clocked-in a net profit of Rs 211 crore in year earlier.
Net sales grew 41% at RS 33,902 crore on year-on-year basis.
Jindal Polyfilms slipped 7.7% to Rs 219 after the company reported 93% decline in net profit at Rs 16.28 crore for the quarter ended December, due to lower sales income and currency losses.
The company had a net profit of Rs 221 crore in the corresponding quarter of previous year.
Shasun Pharmaceuticals was locked in 20% upper circuit at Rs 77.90 after reporting a consolidated net profit of Rs 24.6 crore for the third quarter ended December, against a loss of Rs 9.65 crore in the corresponding quarter last year. Net sales rose 55% to Rs 302 crore on year-on-year basis.
The broader markets ended on a flat note.
The BSE mid-cap index ended at 6,246, up 7 points and the small-cap index shed 2 points to close at 6,891 levels.
The overall breadth was neutral as 1,506 stocks declined while 1,435 stocks advanced.