RTTNews - Expectations that strong momentum in industrial output could help mitigate the effects of a poor monsoon helped the Indian market recover most of its early loss on Wednesday. The benchmark Sensex which fell by 374 points or 2.48% to 14,701 in the afternoon because of brisk selling by foreign funds, monsoon worries and weak global cues, closed off the day's low at 15,020, down 54 points or a modest 0.36% from its previous close.

Likewise, the S&P CNX Nifty recouped most of its early loss before finishing at 4,458, down 14 points or 0.31%.

Powered by growth across all the sectors, particularly in mining, manufacturing and capital goods, India's industrial output for June expanded at its fastest pace in 16 months on the back of stimulus spending and easy monetary policies, government data showed on Wednesday. The index of industrial production rose 7.8 percent in June as against 2.7% in the previous month and 5.4% in the year-ago period.

Commenting on the IIP report, Montek Singh Ahluwalia, deputy chairman of the Planning Commission, said that the worst is behind and the rural jobs program would help further offset the drop in farm income in the coming months.

The BSE small-cap index rose 0.47% and the mid-cap index ended up 0.28%, outperforming large-caps. However, the market breadth was slightly negative, with 1367 losers versus 1215 gainers, while 99 stocks closed unchanged. Realty stocks led the intra-day recovery followed by healthcare, auto and consumer durable stocks, while IT and metal stocks ended deep in the red.

Among the top decliners, Tata Steel and TCS tumbled over 4% each, Hindustan Unilever fell 2.32%, Infosys declined 1.87%, Hindalco eased 1.85%, ONGC lost 1.82% and Strerlite Industries shed 1.76%.

State Bank of India, Larsen & Toubro, Tata Power, Reliance Infrastructure, ICICI Bank and Mahindra & Mahindra were the other prominent losers.

On the other other hand, Bharti Airtel surged up nearly 6%, Tata Motors jumped 4.41%, DLF advanced 2.91%, Sun Pharma rose 2.73% and Jaiprakash Associates added 2.73%. HDFC Bank, Hero Honda Motors, Reliance Communication, ACC, ITC, BHEL and Grasim also ended in positive territory.

MphasiS closed almost unchanged after it signed an agreement to acquire AIG Systems Solutions (AIGSS), part of U.S.-based American International Group Inc., for an undisclosed amount. Maruti Suzuki India has been allotted 700 acres for an R&D facility in Industrial Model Township at Rohtak by the Haryana Government. The stock closed down 0.07%.

Gujarat NRE Coke fell 1.49% after its Australian subsidiary received a no-objection letter from the Australian government for an off-market takeover of Rey Resources. Tata Steel fell 4.20% on reports it has slashed prices of long steel products by up to Rs.1,500 a tonne to match prevailing market rates.

Axis Bank edged up 0.44% on reports that it will issue about 10.83 million shares to its founders. PTC India rose 1.34% on reports that state-run power firms have sought government approval to offload their entire stake in the company.

Orchid Chemicals & Pharmaceuticals advanced 2.22% after it announced the settlement of a patent litigation with Schering-Plough Corp SGP.N, a U.S.-based drug maker. Aban Offshore added 3.86% after Venture Drilling AS, its indirect subsidiary, commenced an 18 months drilling contract for the Drillship 'Deep Venture' with Maersk Oil Angola.

Bharti Airtel soared 5.84% on reports that it has signed an accord with the government of Bhutan to expand its optic fibre cable network to Bhutan. IndusInd Bank gained 2.74% on reports that it will raise $100 million by way of a qualified institutional share placement.

Stocks of multiplex companies fell on concerns the spread of swine flue would cause a dent in their revenues. Adlabs Films slipped 0.35%, Cinemax India fell 2.81% and PVR plunged 7%.

On the BSE, Reliance topped the traded value chart with a turnover of Rs 896.77 crore, followed by Tata Steel (Rs 886.5 crore), Sesa Goa (Rs 850.89 crore), Unitech (Rs 665.76 crore) and Aban Offshore (Rs 634.1 crore).

Unitech led the volume chart with trades of over 77.6 million shares, followed by Suzlon (57.64 million), GVK Power & Infrastructure (47.42 million), Mahindra Satyam (38.11 million) and Ispat Industries (37.48 million).

Elsewhere, while the other markets across Asia ended in negative territory on valuation concerns, European stocks were last trading in positive territory, recovering from early losses, lifted by utility stocks. The U.S. index futures showed modest gains, as traders await policy pronouncement from the Federal Reserve at the conclusion of its FOMC meeting.

Light sweet crude oil price for September delivery fell to $69.38 a barrel in late Singapore trading, down $0.07 from its previous close of $69.45 a barrel in New York on Tuesday.

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