(RTTNews) - Thursday, the Indian market fell sharply amid weak global cues following the release of a string of dismal corporate earnings reports from major companies in the U.S. and due to uncertainty about an economic stimulus plan for rescuing U.S. banks. Traders avoided fresh position ahead of the release of U.S. non-farm payrolls data and potential rate cut announcements from the Bank of England and the European Central Bank Thursday.

The market opened flat tracking firm Asian stocks, but it soon slipped into negative territory, weighed down by weak corporate outlook and selling by foreign funds thus far in the new calendar year. On a net basis, FIIs sold shares worth Rs.4435 crore until 3rd February. An intra-day retreat in the other Asian markets and a subdued trend in the European markets further dampened investor sentiment.

A significant decline in headline inflation rate and reports that the government could consider some changes in tax structure in its interim budget later this month failed to trigger any buying interest. The Inflation rate based on the wholesale price index rose 5.07% in the year to 24 January from 5.64% a week earlier.

Auto, consumer durable, and IT stocks were the worst hit, while metal stocks showed some strength on stronger metal prices on the London Metal Exchange and due to the positive sentiment generated by a revival in China’s manufacturing activity in January.

The BSE Sensex opened at 9,242 and plunged to the day’s low of 9,017 before finishing at 9,091, down 111 points or 1.21% over the previous close, while the S&P CNX Nifty closed at 2,780, down 23 points or 0.82%.

On the BSE the mid-cap index slipped 0.65% and the small-cap and the broad-based BSE 500 indexes ended down nearly 0.90% each. Decliners outnumbered advancers by 1459 to 1001.

Sterlite Industries, Mahindra & Mahindra, Maruti Suzuki, HDFC, TCS, Tata Motors, Larsen & Toubro, Reliance Communication, Hindalco, Wipro, Infosys, Reliance Industries, Hindustan Unilever and Tata Power were the major decliners.

However, Grasim Industries, Tata Steel, Ranbaxy Laboratories, ACC, ICICI Bank, ITC, Sun Pharma and NTPC closed in positive territory.

Reliance topped the traded value with a turnover of Rs.192.85 crore followed by Wire & Wireless (Rs.106.40 crore), Reliance Infrastructure (Rs.99.35 crore), Satyam (Rs. 87.75 crore) and Reliance Capital (Rs.80.30 crore).

Wire & Wireless topped the traded volume with trades of around 5.80 crore shares followed by Mercator Lines (2.20 crore), FSL (1.95 crore), Satyam (1.90 crore) and Ispat Industries (1.50 crore).

Sterlite Industries tumbled 5.71% on reports that the company is close to buying U.S-based bankrupt copper miner Asarco LLC. Satyam Computers plunged 7.68% to Rs. 46.25 on reports that National Australia Bank has decided to suspend all work currently in the early stages of transition to Satyam.

Maruti Suzuki slumped 4.07% on reports that it is developing replacements for its popular hatchback, Wagon-R, and multi-purpose vehicle Omni Van. Weak earnings report and profit downgrade by its Japanese-parent Suzuki Motor also weighed on the stock movement.

Era Infra Engineering declined 1.58% despite bagging a Rs.222.98 crore project from National Thermal Power Corporation. Bharat Heavy Electricals edged down 0.52% despite reports about clinching a deal worth Rs.800 crore from Indian Railways.

Lanco Infratech ended down 0.27% and UTV Software plunged 5.30% after the companies disclosed details about pledging of shares by their promoters to the stock exchanges.

Shipping stocks GE Shipping and Essar Shipping rose sharply after a jump in the Baltic Freight index signaled improved dry bulk shipping rates and thus demand.

Kale Consultants rose 4.26% following reports that it has received a multi-year contract from Kuwait’s luxury carrier Watania Airways

Avaya Global Connect rose 0.97% upon reports that institutional investors and high networth individuals have demanded an open offer after its parent Avaya Inc was acquired globally by private equity firms Silver Lake Partners and TPG Capital in October for roughly $8.3 billion,

Ashok Leyland gained 3.07% on reports that the company and Japan’s Nissan are reviewing business plans for their three joint ventures that envisaged an investment of Rs.2, 300 crore.

Meanwhile, the Securities and Exchange Board of India (SEBI) said that it is conscious of the aberrations in the corporate governance standards in the country and will encourage companies to comply with corporate governance standards on their own. “Over the medium-term, we need to decide (if) any tweaking of regulations is needed to put in place an enhanced level of compliance, transparency and efficiency,” the SEBI chairman C B Bhave said at a CII conclave in Mumbai.

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