Mumbai: The Sensex snapped an eight-session losing streak on Tuesday, climbing 100.47 points to close at 19561.04 even as industrial output and inflation numbers for December underscored the weakness in the economy.
Dealers attributed the Tuesday's rebound in share prices to short covering of derivative positions and said near term outlook remained cautious. The Nifty closed at 5922.50, up 24.65 points over the previous close.
Unitech and DB Realty shares plunged about 18 per cent each following reports of collusion between the CBI prosecutor and the company officials to sabotage the investigation of the 2G scam. Overall, investors continued to ignore second line shares and chose to nibble at frontline stocks which perceive to be more reliable in a bearish market.
ONGC led gainers in the Nifty and Sensex, with the stock climbing nearly 4 per cent on better than expected third quarter earnings. While net profit fell 17.5 per cent, the numbers were better than what most analysts had expected. HCL Tech, Sun Pharma and Tata Motors were the other key gainers, rising about 3 per cent each.
Oil & gas, healthcare, auto and banking stocks were among the best performers of the day, while realty shares took a beating. Industrial output for December declined 0.6 per cent, with sharp contractions observed in the consumer goods and consumer durables space.
To further add to the gloom, consumer price inflation climbed to 10.79 per cent in January, up from 10.56 per cent in December. Rural consumer inflation rose to 10.88 per cent from 10.74 per cent month-on-month and urban inflation climbed to 10.73 per cent from 10.42 per cent.
Market expectations from the Budget have receded further in the last few days as it is apparent that the problems of the economy are structural and the recovery will be a long drawn process.
Jindal Steel and Power, IDFC, ACC and DLF figured among the major laggards of the day, falling between 1.5-3.3 per cent.