Sensex ends 118 pts lower; oil & gas, banks, metals drag

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Indian equity benchmarks closed Friday's trade on a negative note amid volatility seen in the second half of trade. The market was quite positive in the morning trade - seemed like good bounce back, but those gains shaved off in later part of the day.

The 50-share NSE Nifty had touched the 5,600 mark - nearly at three-week high - but could not hold that level due to profit booking in heavyweights. It declined 33.60 points, to settle at 5,516.75. Indices continued the downtrend for third consecutive session.

Rahul Mohindar of viratechindia.com feels that 5,480 on Nifty is an important level.

"The market does seem a lot more vulnerable and that is why we are actually now much closer to 5500. The worry is if we break 5480, then we may see another 100-150 points bash on the downside. Technically, 5480 is the downside level which traders have started watching for. 5600 is definitely the point people want to see the market getting above. So we are going to be in that state of limbo where we are going to be slightly sideways," Mohindar said.

The 30-share BSE Sensex shed more than 250 points from day's high of 18,672.65; it fell 117.7 points, to close at 18,376.48.

Heavyweight Reliance Industries was the leading player in morning trade but after its 37th Annual General Meeting, it slipped into the red due to lack of triggers. The stock lost 1.7%.

Prabhudas Lilladher vice-president Apurva Shah says the stock however, will stay where it is due to "lack of triggers." He is "neutral" on RIL.

"Nothing significant has been announced in the AGM. There is no change in view on Reliance as a result of this AGM. As far as stock price is concerned, AGM is a largely a non event. We have been neutral on Reliance. Much of the bad news related to the gas production is now in the price but there aren't enough drivers to take it forward from here. The lack of triggers will keep the stock at these levels," shah said.

Reliance Industries' chairman Mukesh Ambani announced a dividend payout of 80%. Declaring that the company will be debt-free this year on a net basis in the current 2011-12 fiscal, Ambani said the company's free cash stands at Rs  42,393 crore.

Largecaps like TCS, HDFC, Tata Motors, ITC, SAIL, Axis Bank, Sun Pharma, BHEL, Hindalco, JSPL, Sterlite, DLF, Ranbaxy and Dr Reddy's Labs were down 1-3%. ONGC, Bharti Airtel, NTPC, ICICI Bank and HDFC Bank too were under pressure.

However, Anil Dhirubhai Ambani Group companies' shares bounced back quite smartly today though these stocks erased some gains in the second half of trade. Reliance Communications surged nearly 4% as 2G Trial court dismissed plea for charging Anil Ambani. Reliance Infrastructure, Reliance Power and Reliance Capital fell 1-2.5%.

Heavyweight L&T was the leading gainer, with rising 2.4%. Infosys, Maruti, Bajaj Auto, M&M and Sesa Goa were other gainers.

Midcaps - eClerx Services, Manappuram, Kirloskar Oil, Sunteck Realty and Pfizer rallied 4.5-7% while Sterling International, Monsanto India, Jyothy Labs, HCC and Simplex Infra fell 3-10%.

Sun TV Network was the most active share on exchanges, with rising 4%. Sun TV strongly denied any role in 2G scam. Sun TV CFO VC Unnikrishnan said neither Sun TV nor Kalanithi Maran have anything to do with 2G scam.  The stock had fallen 26% yesterday.