RTTNews - The Indian market ended sharply lower on Thursday, as traders took profits in frontline stocks and bought under-valued smallcap stocks. Weak cues from the overseas market also kept the large-cap indexes under check.

A report released by the government showed that the headline inflation rate held near a three-decade low, giving the central bank more room to cut its key policy rates. Driven by the rising prices of essential food items, India's wholesale price index rose 0.61% in the 12 months to May 9 compared to an annual rise of 0.48% in the previous week and 8.57% in the corresponding week a year ago.

Trading was extremely volatile. After opening lower at 14,043, the BSE Sensex recovered to the day's high of 14,090 in the afternoon amid choppy trading. The recovery proved short lived and the index retreated to hit a low of 13,704 before finishing at 13,737, down 324 points or 2.31% from its previous close. The S&P CNX Nifty fell 60 points or 1.39% to 4,211.

However, broader market indices on the BSE outperformed the benchmarks. While the broad-based BSE 500 index ended down 1.33%, the mid-cap index closed flat and the small-cap index moved up 2.58%. The market breadth was positive, led by smaller companies. Advancers outnumbered decliners by 2095 to 629, while 43 stocks closed unchanged.

Of the 13 sector al indices on the BSE, the public sector index gained the most, rising 2.75%. The oil & gas and the consumer durable indexes rose around 0.80% each, but the capital goods index bore the brunt of the selling pressure with a 5.41% loss. Among the other decliners, banking stocks fell nearly 3% on an average, the auto index declined 2.07% and the IT index moved down 1.88%.

Twenty-four out of 30 Sensex stocks ended in the red. Larsen & Toubro plunged 8.59%, Maruti Suzuki plummeted 6.93%, ICICI Bank slumped 5.15% and HDFC tumbled 5.01%. Hindalco, Wipro, TCS, Mahindra & Mahindra, BHEL, State Bank of India, ACC and DLF also closed deep in the red.

However, ONGC surged up 8.41%, Reliance Communication rallied 4.52%, Ranbaxy advanced 2.66%, NTPC rose 1.87%, Reliance Infrastructure gained 1.36% and Jaiprakash Associates ended up 0.17%.

Among state-owned oil marketing companies, HPCL surged up 14.64%, BPCL soared 10.22% and IOC climbed 14.52% on speculation that the pricing of petrol and diesel would be deregulated. De-controlling of the fuel prices, if envisaged, will enable these companies fix their prices in line with crude oil price in the international markets. Oil explorer ONGC jumped 8.4%, but Reliance Industries fell 1.59% and Cairn India slipped 1.08%.

Apollo Hospitals Enterprise climbed 15.76% despite receiving a show cause notice from the Directorate of Enforcement. In a reply to the notice, the company said that that it used the proceeds of GDR issue made in 2005 for expanding its hospital projects including investments in Bangalore and Kakinada.

Pharmaceutical company Aurobindo Pharma rallied 5.61% after it expanded its partnership with global pharma major Pfizer Inc by executing licensing and supply agreements with the latter for solid dosage and sterile products for a number of emerging markets.

Merck edged up 0.41% after its board approved buy back of its outstanding equity shares in two tranches with requisite approvals. The company approved to buy back up to 25% of its total paid up capital to the extent of Rs.112.78 crore at a maximum price not exceeding Rs.435 per share.

Areva T&D India lost 5.11% even as it bagged an order worth Rs.110 crore from a state-run company of West Bengal. Likewise, Patel Engineering ended down 1.74% despite bagging new orders worth Rs. 708.04 crore from Vidarbha Irrigation Development Corpo and the Himachal Pradesh Power Corporation.

Bajaj Auto jumped 5.61% on better-than-expected quarterly results. The company's consolidated net profit for the March quarter fell nearly 50% to Rs.69.14 crore from Rs.137.71 crore in the same quarter last year.

IT services provider HCL Technologies lost nearly 2% even as it entered into an outsourcing services engagement with MTV Networks (MTVN) for developing its online media platform.

Automaker Tata Motors fell 1.77% after it raised Rs.4, 200 crore ($840 million) through the issue of secured non-convertible rupee debentures (NCDs) to financial institutions in the domestic market.

Garden Silk Mills rallied 6.51% after the company said that is setting up a spinning plant and expanding yarn processing capacity at an capital outlay of Rs.150 crore. Gati advanced 5.73% on signs of improvement in the domestic air cargo segment.

Adani Enterprises ended down 0.58% after the company proposed to raise Rs.1, 500 crore through a qualified institutional share placement. Meanwhile, the company's standalone net profit for the March quarter rose nearly 27% year-over-year.

Housing Development and Infrastructure rose 0.99% and Sobha Developers surged up 9.09% amid reports that they will raise around Rs.3, 000 crore through qualified institutional placement by June-end.

Reliance Infrastructure gained 1.36% on reports that its wholly owned subsidiary Reliance Power Transmission has tied-up Rs. 970 crore for its first transmission utility project in the western region of the country.

HDIL topped the traded value with a turnover of over Rs.277 crore followed by ICICI Bank (Rs.242.20 crore), DLF (Rs.240.59 crore), Reliance (Rs.210.56 crore) and Tata Steel (Rs. 209.59 crore).

Ispat Industries topped the traded volume with trades of around 24.8 million shares followed by Reliance Natural Resources (24.45 million), Unitech (20.42 million), IFCI (16.81 million) and Suzlon (13.47 million).

Elsewhere, the European markets were under pressure after the Standard & Poor's cut its credit-rating outlook on the United Kingdom to 'negative' from 'stable' though it affirmed the country's 'AAA' sovereign credit rating. Asian stocks stumbled Thursday, paring some of this week's gains. Lower U.S. futures pointed towards a subdued opening on Wall Street on Thursday.

For comments and feedback: contact editorial@rttnews.com