A disappointing 3.5% decline in factory output in March saw BSE benchmark Sensex shedding 127 points -- its fall for the fourth consecutive day -- to register the biggest weekly loss of 3.2% in 2012.
The contraction in industrial production came as a jolt to the market already reeling under worries of a slowing economy and renewed concerns over the recovery in eurozone.
The bearish sentiments prevailed when the market resumed trading today morning and the 30-share barometer fell further to its intra-day low of 16,233.76 after weak factory data trickled in and Sensex ended 127.07 points lower at 16,292.98, a drop of 0.77% from its previous close. Investors became poorer by nearly Rs 48,000 crore today.
In the previous three days, Sensex has lost nearly 500 points after a rupee threatened to breach 54-level against the dollar that spooked foreign funds.
Brokers said markets made a feeble attempt to rally and touched a high of 16,447.24 on hopes of rate cuts by RBI but failed to sustain the momentum. At close, 21 stocks in Sensex ended with losses, eight settled with gains. Interest-rate sensitive auto and banking sectors, however, posted gains.
The rupee, which had strengthened slightly post the RBI directive yesterday, depreciated once again today.
Tata Power which closed with a fall of 4.89% was the biggest loser in Sensex pack, followed by Sun Pharma (3.87%), Hindalco (3.32%), Coal India (2.21%) and Maruti (2.10%). ITC, Cipla, ONGC, Wipro, Infosys and Larsen and Toubro lost in the 1-2% range.
BSE-Healthcare index lost 1.97% followed by BSE-Power (1.40%), BSE-FMCG (1.27%) and BSE-Metal (1.17%). Overall, 11 out of 13 sectoral indices ended lower today.
"The de-growth in IIP data for March came at sharp contrast to the IIP growth in February. Market reacted negatively to the data and slipped down further...the short term trend has become bearish as of now," said Rakesh Goyal, Sr. Vice President, Bonanza Portfolio.
Asian markets ended weak on concern that Europe's debt crisis may worsen amid weaker-than-expected Chinese economic data for April.
Key benchmark indices in China, Hong Kong, Japan, Singapore, South Korea and Taiwan settled down between 0.63% and 1.43%.
European stocks too displayed a sluggish trend in their afternoon trade after J.P. Morgan Chase and Co. disclosed a USD 2 billion derivatives trading loss yesterday, with banks leading the loss.
Indications of a lower opening in US index futures also affected the global market sentiments.
Major losers from the Sensex pack were Tata power (4.89%), Sun Pharma (3.87%), Hindalco Industries (3.32%), Coal India (2.21%), Maruti Suzuki (2.10%), ITC (2.07%), ONGC (1.89%), Wipro (1.63%), Infosys (1.55%), Larsen (1.47%), Gail India (1.19%) and HDFC Bank (1.15%).
However, Bajaj Auto shot up by 3.48% and Tata Motors closed 2.66% higher. Sterlite Industries was unchanged.
"Future RBI action and foreign flows will likely be dictated by government's reform initiatives and the outlook on the monsoons. We believe that, markets will start moving up sustainably, only once there are indications of reform initiatives being taken up by the government," said Dipen Shah, Head of Fundamental Research, Kotak Securities.
The market breadth continued to remain negative today as 1,772 scrips finished with losses while 981 scrips ended with gains.
The total turnover eased further to Rs 1,923.53 crore from Rs 1,941.62 crore on Friday.
FIIs turned net buyers after three days of selling to the tune of Rs 1,319.14 crore as per SEBI data and picked up shares worth Rs 317.42 crore on Friday as per stock exchanges data.