POOR SHOW

Indian stock markets commenced the fresh week on a daunting note with the benchmark indices once again suffering nasty lacerations of over two percentage points in Monday's session. The frontline gauges failed to showcase any kind of resilience through the session and kept drifting to lower levels, breaking one technical level after another to eventually settle around the psychological 4,750 (Nifty) and 15,900 (Sensex) levels. Market participants turned skittish after the release of distressing Industrial growth numbers which showed that IIP decelerated for the first time in 28 months as it shrank 5.1% from a year earlier, underscoring the fact that economic slowdown has taken deep roots in the Indian economy. The ugly IIP figures augmented speculations that India's hawkish central bank would abstain from hiking key interest rates to combat inflation despite it persisting at stubbornly high levels of around 9%. Approving that the October IIP data is discouraging, PMEAC chairman C Rangarajan opined that with pickup in public investments and in production for those goods which are in the public demand including areas like coal, roads and railways, can provide a great stimulus to the economy. Meanwhile the disappointing IIP data also had an adverse effect on rupee which got dragged closer to the all time low levels hit in November. On the global front, largely optimistic sentiments prevailed across the Asian region. However, the European counterparts plunged to lower levels. Sentiments globally went awry after rating agency Moody's issued a fresh warning stating it will review the ratings of all EU countries in the first three months of 2012 and blamed "the continued absence of decisive policy measures" to avert the region's onerous debt crisis. Back home, reports that CBI filed chargesheet against Ravi Ruia and Anshuman Ruia, sent Essar group stocks like Essar oil, Essar Ports and Essar Shipping sinking around ten percent in the dying moments of trade.
Earlier on Dalal Street, the benchmark got off to an encouraging start tracking the optimism prevailing in Asian markets as investors cheered the outcome of EU summit where policymakers settled on a plan to introduce tougher fiscal rules for the 17-member euro zone countries. However, the optimism petered out sooner than later and the indices slipped into the negative terrain in morning trades. Thereafter, started the long slide for the benchmark gauges which only made some half-hearted attempts of recovery, but all proved futile. The bourses eventually got dragged to the lowest point of the day by the end and trebled the sorrow of closing in the red terrain. Moreover, the broader markets too settled on a pessimistic note with cuts of under two percent, in line with their larger peers. On the BSE sectoral space, the Metal counter continued to bear the maximum brunt of selling pressure and nosedived by over four percent, being the top laggard in the space followed by the rate sensitive Bankex pocket that sank close to three percent. On the flipside only the IT sector managed to keep its head above the water and went home with good gains of around a percent. The markets sank on larger volumes of over Rs 1.55 lakh crore while the turnover for NSE F&O segment too remained on the higher side as compared to Friday at over 1.43 lakh crore. The market breadth remained pessimistic as there were 798 shares on the gaining side against 1943 shares on the losing side while 121 shares remained unchanged.
Finally, the BSE Sensex plummeted by 343.11 points or 2.12% to settle at 15,870.35, while the S&P CNX Nifty shaved off 102.10 points or 2.10% to close at 4,764.60.
The BSE Sensex touched a high and a low of 16,360.32 and 15,839.96 respectively. The BSE Mid cap and Small cap index were down by 1.90% and 1.54% respectively.
The top gainers on the Sensex were Wipro up 2.56%, Infosys up 0.93% and TCS up 0.70%. While, Tata Power down 6.46%, Hindalco Industries down 6.37%, Jindal Steel down 5.14%, SBI down 4.87% and JP Associates down 4.81% were the top losers on the index.
The top losers on the BSE sectoral space were, Metal down 4.14%, Bankex down 2.98%, Oil & Gas down 2.80%, PSU down 2.78% and Realty down 2.67%, while IT up by 0.95% was the only gainer on the BSE sectoral space. 
Meanwhile, India's Index of Industrial Production (IIP) for month of October 2011 fell at its 28 month lowest level and registered contraction of 5.1% which reflects the industrial growth getting affected by the non-stop rate hikes by the Reserve Bank of India (RBI) and high inflation. According to the data released by the Ministry of Statistics & Programme Implementation, industrial production measured by the IIP stood at -5.1% in October 2011 compared to 11.37% in October 2010. During the first seven months of current financial year, IIP growth stood at 3.5% compared to 8.7% in the same period of 2010.
The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of October 2011 stood at 120.9, 165.9 and 152.1 respectively, with the corresponding growth rates of (-) 7.2%, (-)6.0% and 5.6%. The cumulative growth in the three sectors during April-October, 2011-12 over the corresponding period of 2010-11 has been (-)2.2%, 3.7% and 8.9% respectively, which moved the overall growth in the General Index to 3.5%.
In October 2011, in terms of industries, 13 out of the 22 industry groups in the manufacturing sector have shown positive growth during the month of October 2011 as compared to the corresponding month of the previous year. The industry group 'Medical, precision & optical instruments, watches and clocks' has shown the highest growth of 30.8%, followed by 18.4% in 'Office, accounting & computing machinery' and 15.3% in 'Radio, TV and communication equipment & apparatus'. On the other hand, the industry group 'Electrical machinery & apparatus n.e.c.' has shown a negative growth of 58.8% followed by 12.1% in 'Machinery and equipment n.e.c.' and 11.4% in 'Rubber and plastics products'.
As per Use-based classification, the growth rates in October 2011 over October 2010 are (-) 0.1% in Basic goods, (-) 25.5% in Capital goods and (-) 4.7% in Intermediate goods. The Consumer durables and Consumer non-durables have recorded growth of (-) 0.3% and (-) 1.3% respectively, with the overall growth in Consumer goods being (-) 0.8%.
Some of the important items of capital goods showing high negative growth during the current month and thus contributing to the low growth of the overall index for the month include 'Cable, Rubber Insulated' [(-) 82.9%], 'Cement Machinery' [(-) 74.6%], 'Insulated Cables/Wires all kind' [(-) 38.2%], 'X-ray equipment' [(-) 35.8%] and 'Plastic Machinery including Moulding Machinery' [(-) 32.3%]. However, some important items of the capital goods are also showing significant growth. These are:  'Conductor, Aluminium' (46.6%), 'Boilers' (45.8%), 'Heat Exchangers' (35.5%) and 'Machine Tools' (31.4%).
The other important items showing growth during the month are: 'Fruit Pulp' (254.2%), 'Cashew Kernels' (91.9%), 'Petroleum Coke' (69.7%), 'Rice' (54.4%), 'Marble Tiles/Slabs' (47.2%), 'Steel Castings' (41.7%), 'Leather Garments' (33.6%), 'Aluminium Tubes/Pipes' (30.8%) and 'Woollen Carpets' (30.7%).
Meanwhile the government had also revised the IIP growth figures for September. After the upward revision, the IIP figure for month of September increased to 2% from the provisional estimate of 1.9%. 

Most of the experts and policymakers had expected that IIP for the month of October will be slower, but not negative figures. C Rangarajan, chairman of PMEAC said that the data was disappointing particularly that of capital goods. According to Rangarajan the public sector investment needs to pick up for any sort of a recovery. 'I think containing fiscal deficit at 4.6% will be a challenge,' he said adding, '...still hoping for GDP growth between 7 and 7.5%,' said Rangarajan.

In the second quarter of 2011-12, India's economic growth stood at 6.9% with is lowest in last eight quarters as a result, in the first six months of current fiscal year, India's Gross Domestic Product (GDP) fell to 7.3% compared to 8.85% in the same period of last financial year.
IIP's discouraging figures for October has raised the expectation that the RBI would reduce its policy rates at its upcoming review on December 16. However, a lot will depend on the wholesale price index (WPI) based inflation data for November 2011 which will be released on December 14.
The S&P CNX Nifty touched a high and low of 4,910.25 and 4,755.55 respectively.
The top gainers on the Nifty were Wipro up 2.54%, TCS up 1.20%, HCL Infotech up 1.08% and Infosys up 1.02%. On the flip side, Tata Power down 7.04%, Hndalco down 6.32%, SAIL down 6.02%, JP Associate down 5.68% and Jindal Steel down 5.48% were the top losers on the index.
The European markets were trading in red. France's CAC 40 lost 1.19%, Britain's FTSE 100 down by 0.65% and Germany's DAX plunged by 1.76%.
The Asian markets made a mixed closing on Monday, though most of the indices closed in green, some others lost their momentum after a positive start. The Chinese market remained in somber mood since beginning on concern of slowdown in growth after the government said it will maintain property curbs next year. The central bank set the strongest reference rate in a month. However, Chinese Premier Wen Jiabao and officials are meeting to map out economic policies for 2012 and may add more stimulus after a report of shrinking trade surplus showed Europe's debt crisis hitting exports.
Hang Seng reversed all its gains and closed marginally in red on report of weakening global economy. However, Japanese markets surged by over a percent as shares of exporters gained on confidence improvement among consumers in the US.
Stock market in Malaysia remained closed on Monday.