Capital goods, realty, metal, cement, power and FMCG companies also witnessed heavy selling.
The 30-share BSE Sensex closed at 20,203.34, down 136.55 points and the 50-share NSE NIfty fell 44.95 points to settle at 6,090.90.
Global markets too witnessed low trading though they showed some recovery.
Mkts continue southbound on IIP data
The Indian indices continued to reel under the disappointing IIP numbers. Capital goods, realty, metal and FNCG stocks also witnessed heavy selling.
At 2:20 pm, BSE Sensex was down 226.10 points at 20,113.79 and NSE Nifty was at 6059.60, down 76.25 points.
Hindalco, SAIL, HDFC, Reliance Capital and Kotak Mahindra Bank were the largecap losers.
However, Mahindra and Mahindra, Hero Honda, GAIL, TCS and Sterlite Industries were marginally up
Sensex sheds 180 pts on disappointing IIP data
Sensex nearly crashed 200 points and Nifty too plunged into the red on the upsetting Industrial growth numbers. At 12 pm, BSE Sensex was at 20,152.91, down 186.98 points and NSE Nifty was at 6075.25, down 60.60.
The Index for Industrial Product (IIP) for Aug 2010 stood at 5.6 per cent as against 10.6 per cent recorded in Aug 2009.
Manufacturing sector declined to 5.9 per cent from 10.6 per cent, mining sector dipped to 7 per cent versus 11 per cent, electricity sector growth was at 1 per cent as against 10.6 per cent.
Two sectors' growth even came in negative. Capital goods sector registered negative 2.6 per cent growth against 9.2 per cent while consumer non-durables stood at -1.2 per cent versus 6.1 per cent (YoY).
Reacting to these numbers, the BSE Capital Goods, Metal, Realty, FMCG, Power and Oil & Gas indices slipped 1 to 1.8 per cent.
In the capital goods space, L&T and BHEL declined 2.2 per cent and 1.75 per cent respectively.
Mkts open weak on profit booking; -ve Asian cues
Profit booking in heavyweights and weak Asian cues forced the Indian indices to open the day on a disappointing note.
At 9:01 am, NSE Nifty was trading at 6107, down 28 points and BSE Sensex was at 20263, down 76 points.
Selling pressure was seen in fontliners like IDFC, HDFC Bank, HDFC, Dr Reddys Labs, L&T, Hindalco, Cairn India, Tata Steel, Sesa Goa, NTPC, ITC, Reliance Industries and SAIL.
However, on a positive note, Suzlon Energy, ICICI Bank, Maruti and Tata Motors were witnessing buying interest.
Gallantt Ispat, listed on Monday, Oct 11 was trading at Rs 74, down 8.8 per cent.
Two new listings Tecpro Systems was trading at Rs 423, 19 per cent above issue price of Rs 355 a share and Cantabil Retail was trading at Rs 116, down 13.6 per cent from issue price of Rs 135 a share.
In the midcap and smallcap space, Chambal Fertiliser lost 1 per cent and RCF was trading down 0.5 per cent. On the positive side, Sonata Software gained 5 per cent and Edelweiss Capital went up 2 per cent.