A spike in the inflation numbers took its toll on the indices. The Sensex ended at 17,098, lower by 21 points and the Nifty closed at 5,106, down 12 points. The FMCG, banking and consumer durables pack had a poor day.
The markets had opened soft in line with Asian cues. Most Asian stocks fell in morning trades following a decline in oil and gold prices.
The Dow and S&P 500 had, however, closed up for a third straight session on Friday after consumer reports pointed towards a steady economic recovery.
The indices rebounded swiftly after Dubai said that it had received $10 billion from Abu Dhabi to help it repay $4.1 billion in an Islamic bond maturing on December 14. But that was before announcement of the inflation numbers.
Inflation jumped to 4.78 per cent in November from 1.34 per cent in October, driven by rising prices of essential food items such as pulses, fruits and vegetables.
Inflation was 8.48 per cent in the corresponding period last year. The food items which became dearer were urad (24 per cent), moong (14 per cent) and chicken (10 per cent). Fruits and vegetables became costlier by 3 per cent.
Attributing rising prices to supply side constraints, Suresh Tendulkar, former chairman of the Prime Minister's Economic Advisory Council (PMEAC), said the RBI could take steps to withdraw liquidity and tame rising prices in the review of its annual credit policy next month.
Meanwhile, the Centre for Monitoring Indian Economy has revised its GDP growth forecast for the current fiscal to 6.7 per cent from 6.2 per cent announced last month.
The revision comes on the back of lower-than-expected damage to smaller crops due to natural calamities and robust industrial growth in September.
Godrej Properties has fixed the issue price for its initial public offer at the lower-end of the price band at Rs 490 a share.
The major losers on the BSE were Bharti Airtel (shed Rs 11 or 3.4% at Rs 319), Hindustan Unilever (lost Rs 4 or 1.7% at Rs 268) and HDFC Bank (ended lower by Rs 27 or 1.5% at Rs 1756. ITC, ICICI Bank and Reliance Communication were the other notable losers.
The leading Sensex gainers were ACC (higher by Rs 43 or 5.3% at Rs 858, Grasim (stronger by Rs 75 or 3.5% at Rs 2470) and Wipro (up Rs 14 or 2.3% at Rs 658).
The market breath was weak. Out of 2901 stocks traded on the BSE, there were 1172 advancing stocks as against 1669 declines.
Cox & Kings topped the value charts on the BSE with a turnover of Rs 316.33 crore, followed by Tata Steel (Rs 116.54 crore), SBI (Rs 112.88 crore), HDIL (Rs 100.65 crore) and Reliance (Rs 77.45 crore).
Cals Refineries led the volume charts with trades of 11.19 million shares.
It was followed by Unitech at 8.62 million, Cox & Kings at 7.17 million shares, Suzlon at 6.36 million shares and IFCI at 6.15 million shares.
