The Sensex is trapped between 17,700 and 17,400. The bias, however, is to the downside

The market, which began the session on a weak note, following negative cues from across the globe, tumbled over 1% at the end of trade. While Wall Street ended lower on Wednesday, lower manufacturing growth in China in June dragged the Asian markets lower. This apart, a 16% deficit in the monsoon rains in June also weighed on the sentiments. The Sensex ended at 17,509, down 191 points (1.08%) and the Nifty tanked 61 points (1.15%) to shut at 5,251.

Asian markets finished in the red on Thursday as investors stayed on the sidelines on worries over disappointing Chinese economic data. The HSBC Holdings' Purchasing Managers' Index (PMI) for manufacturing activity showed a more-than-expected fall in China's manufacturing growth in June. The index slipped to its 14-month low of 52.1 in June 2010 from 53.9 in May 2010.

The Shanghai Composite was down 24.58 points (1.02%) to 2,373.79; the Hang Seng was down 119.91 points (0.59%) to 20,128.99; the Nikkei 225 ended lower by 191.04 points (2.04%) to 9,191.60; the Straits Times was down 15.16 points (0.53%) to 2,820.35; the Seoul Composite was down 12.05 points (0.71%) to 1,686.24 and the Taiwan Weighted was down 75.31 points or 1.03% to 7,254.06.

US markets continued their downward journey for yet another day as the weak jobs report dragged down the markets into the red again. Private employers added just 13,000 jobs in June, lower than expectations.

The Dow was down 96.28 points (0.98%) to 9,774.02. The S&P 500 was down 10.53 points (1.01%) to 1,030.71, while the Nasdaq fell by 25.94 points (1.21%) to 2,109.24.

Back home, the monsoon rains were 16% below the long term average (LTA) in June, as per the India Meteorological Department (IMD) data. The Met in an update last month had said that the monsoon this season would be 102% of the LPA. However, the IMD added that there is still no cause for worry.

HSBC's PMI, based on a survey of 500 companies, was down to 57.3 in June from 59.0 in May, which was the highest in more than two years. However, the June PMI was the 15th consecutive month that the index has been above the 50 mark.

Food inflation declined by 3.98 percentage points to 12.92% for the week ended 19th June, as the rate of price rise in cereals and vegetables showed a remarkable drop due to a high base effect. The fall in food inflation would provide some breather to the government, which is struggling hard to control prices of essential items that may again rise due to the cascading effect of the diesel price hike last week.

India's exports rose 35.1% in May to $16.1 billion year-on-year, but the trouble brewing in some European economies may weigh on future demand. The seventh straight month of rise was registered on a low export base of $11.95 billion in May 2009, when shipments had plunged by over 29% from the previous fiscal under the impact of the recession in the US and several other advanced economies. For the April-May 2010-11 period, exports grew by 35.7% to $33 billion against the year-ago period.

Foreign institutional investors were net buyers on Wednesday, purchasing equities worth Rs589 crore. Domestic institutional investors were net sellers, offloading stocks worth Rs151 crore.

The country's largest carmaker, Maruti Suzuki India (down 1.7%) reported a 17.28% jump in June sales to 88,091 units over 75,109 units in the same month last year. In the domestic market, Maruti sold 72,812 units against 61,773 units in June 2009, an increase of 17.87%. Exports surged 14.57% to 15,279 units from 13,336 units in the year-ago period.

Reversing its earlier decision, the US Exim Bank has agreed to provide $600 million in loan guarantees to suppliers for Reliance Power's (RPL) (down 1%) coal-fired project and a mine in Sasan, Madhya Pradesh. Wednesday's announcement would help preserve 1,000 jobs in Wisconsin and 13 other states.

Last Thursday, the Export-Import Bank of the United States had rejected a request from RPL to finance the projects on environmental grounds.

India's Fortis Healthcare Ltd (up 1.2%) today responded to Malaysian sovereign wealth fund Khazanah's bid to control Singapore-based Parkway Holdings by offering to acquire all the shares of the company. Fortis has made an offer of S$3.80 per piece to acquire Parkway against Khazanah's offer of S$3.78 a share.

The country's largest private sector lender ICICI Bank (down 2.3%) on Wednesday pegged its minimum lending rate at 7.5%, the same as State Bank of India's (SBI) rate. The existing benchmark prime lending rate of ICICI Bank stood at 15.75 per cent. As per the RBI directive, the base rate system, which aims at introducing transparency in lending operations, will replace the existing BPLR from Thursday.