As expected, another downleg of the ongoing decline has started. The support has shifted down to 5,400 on the Nifty

The market opened lower, tracking the weak Asian markets in early trade and concerns about the industrial output data for March and weekly food inflation numbers, which were expected today. The Sensex opened at 18,525, down 60 points from its previous close and the Nifty was 27 points lower at 5,538.

The subdued trend prevailed till the mid-morning session, when a small bounce-back was noticed taking the market to the day's high. At the intra-day high the Sensex touched 18,610 and the Nifty was at 5,573. However, even after the Index of Industrial Production (IIP) data turned out better than expected, the market dipped into the red.

An easing of the food inflation numbers for the week ended 30th April also did not help the market. The slide continued through the post-noon session with the pressure on metals, banking and capital goods sectors. A weak opening on key European bourses also added to the woes.

The indices touched their intra-day lows at around 3.05pm with the main indices at 18,314 and 5,476. With the exception of the BSE Realty index, all sectoral indices were in the negative today.

At the end of trade today, the Sensex closed 249 points lower at 18,336 and the Nifty was down 79 points at 5,486. The advance-decline ratio on the National Stock Exchange was a dismal 504:1198.

With today's decline, a fresh downturn has started that may take the Nifty to 5,400 and in case of extreme selling to 5,250.

Among the broader markets, the BSE Mid-cap index declined 0.91% and the BSE Small-cap index settled 1.06% lower.

BSE Realty (up 0.48%) was the only sectoral index in the green. Rate-sensitive sectors led the decline. BSE Metal (down 2.99%), BSE Capital Goods (down 1.42%), BSE Bankex (down 1.39%), BSE Power (down 1.20%) and BSE IT (down 1.16%) were all down.

ONGC (up 0.58%), Hindustan Unilever (up 0.52%) and DLF (up 0.18%) were the gainers on the Sensex, whereas Sterlite Industries (down 4.76%), Hindalco Industries (down 4.66%), HDFC (down 2.77%), TCS (down 2.31%) and Jaiprakash Associates (down 2.25%) were the major losers.

Growth in industrial production for the year 2010-11 fell to 7.8% compared to 10.5% in the previous fiscal. The government attributed the poor performance to a slowdown in manufacturing and mining.

Factory output in March also witnessed lower growth of 7.3%, compared to 15.5% in the period a year ago. However, the performance in March was an improvement from the 3.6% growth registered in February this year.

Food inflation dropped to 7.7% for the week ended 30th April, the lowest level in 18 months. The rate of price rise in food items, as calculated on the basis of the wholesale price index (WPI), was 8.53% in the previous week and 21.46% in the comparable period of 2010.

The decline in food inflation is seen as a breather for the government, as the rate of price rise has stubbornly remained high despite its fiscal measures and the Reserve Bank of India's (RBI) monetary tightening.

Asian markets, barring the Taiwan Weighted, settled lower on concerns that China might go in for another rate-tightening round as early as this weekend. Material and energy stocks ended lower after crude oil for June delivery plunged 5.5% to settle at $98.21 a barrel yesterday in New York. Copper fell to the lowest price in five months after China's inflation topped the government's target, signalling further monetary-policy tightening that may curb metal demand.

The Shanghai Composite declined 1.33%, the Hang Seng fell by 0.94%, the Jakarta Composite was down 0.77%, the KLSE Composite fell by 0.24%, the Nikkei 225 tanked 1.50%, the Straits Times retraced 1.47% and the Seoul Composite tumbled 2.03%. On the other hand, the Taiwan Weighted added 0.15%.

Back home, the equities segment saw a meagre participation from institutional investors on Wednesday. Foreign institutional investors were net buyers of stocks worth Rs125.07 crore while domestic institutional investors were net buyers of shares worth Rs89.12 crore.