Extending the previous day's smart recovery, the benchmark Sensex started the day 417.99 points up at 16,541.14 from its previous close of 16,123.15 and further surged over 560 points to a day's high at 16,683.37 on fresh buying and firm trend in Asian markets during early trade.
However, it failed to hold the gains till late trade and slipped into the red at a day's low at 16,064.09, shed over 629 points on selling pressure triggered in the market after the report of drop of index of industrial production and low growth in manufacturing sector, brokers said.
Meanwhile, the broader based S&P CNX Nifty index of Nation Stock Exchange touched a day's high of 5,019.20 and a low of 4,854.75, came off over 164 points in late trade before closing almost flat, 6.10 points up at 4,872.00 from its previous close of 4,865.90.
Out of 30 stocks of Sensex pack, 16 shares tumbled in late trade, pushing the positive Market breadth towards negative zone.
Metal and IT scrips dropped sharply while real estate and select private sector banking stocks sustained the loss and ended in green.
As per data released by the government this afternoon, growth in index of industrial production (IIP) slipped to 5.3 per cent in January 2008 as compared to 11.6 per cent in January 2007, the lowest since October 2006, when it stood at 4.51 per cent. Growth in the manufacturing sector also declined to 5.9 per cent in January 2008 as against 12.3 per cent in January 2007.
The market breadth, which was positive throughout the day, turned negative in late trade as small-cap and mid-cap shares succumbed to selling pressure. On BSE 1,448 shares declined as compared to 1220 that advanced and 59 shares remained unchanged.
The BSE Mid-Cap index was down 1.19pc to 6,909.85 and Small-Cap index was down 0.32 pc to 8,531.92, underperforming the Sensex. The total turnover amounted to Rs 6372 crore as compared to Rs 7,271.80 crore yesterday.
Turnover at NSE futures&options segment was quoted at Rs 44632.78 crore as compared to Rs 38176.25 crore yesterday. Sectoral indices on BSE displayed mixed trend today. The BSE Consumer Durables index slipped 1.36 pc, IT index came down 2.15 pc, Metal index was down 2.39 pc and the BSE Auto, with a marginal loss, underperformed the Sensex.
However, BSE Capital Goods index ended with a marginal gain, Realty index was up 1.23 pc, while Oil&Gas, health Care and Bankex ended about one per cent up in late trade.
Metal shares declined on profit booking. Hindalco Industries lost 6.51 pc to Rs 189.70 on 15.86 lakh shares. It was the top loser from the Sensex pack. Tata Steel dropped 6.48 pc to Rs 766. The stock slipped sharply from day's high of Rs 838 in early trade. The company reported 34.22 pc rise in consolidated net profit to Rs 1,415.54 crore on 428.61 pc spurt in total income to Rs 32,096.03 crore in Q3 December 2007 over Q3 December 2006.
IT pivotals extended losses in late trade on worries of Rupee appreciating further. Infosys ended down 3.41 pc to Rs 1379.90, Satyam Computer Services was down 4.74pc to Rs 377.10, Wipro declined 0.22pc to Rs 391.50.
Other heavyweigts, DLF ended down 5.49 pc, Reliance Communications came down 2.29 pc and Tata Motors declined 2.06 pc.