Market report. Sensex, Nifty end lower as consumer, metals decline

Consumer and metal stocks dragged equity benchmarks lower on Thursday after two straight sessions of gains, as weak US economic data stoked recession fears in global markets.

The Nifty 50 index was down 0.32 per cent at 18,107.85 at close, while the S&P BSE Sensex declined 0.31 per cent to 60,858.43.

"The crucial issue influencing equity markets globally is whether the US will succeed in containing inflation without falling into a recession," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

"When data indicates a possible recession, US markets go down and all other markets are impacted."

US data showed retail sales fell the most in a year in December, while manufacturing output recorded its biggest drop in nearly two years.

Further dampening sentiment for risky assets, Federal Reserve policymakers on Wednesday signalled they will push on with more interest rate hikes, even as inflation shows signs of having peaked and economic activity is slowing.

In domestic trading, most of the 13 Nifty sectoral indexes closed in the negative territory, with fast-moving consumer goods (FMCG) and metal among the worst decliners, falling 0.86 per cent and 0.56 per cent respectively.

"Metals have benefited on hopes of demand recovery from China, the re-opening of its borders, and now we are seeing some profit booking in the sector," said Siddhartha Khemka, head of research (retail) at Motilal Oswal Financial Services.

Hindustan Unilever closed 1.36 per cent lower ahead of its third-quarter earnings results and weighed the most on the FMCG index which fell 0.86 per cent. Investors will look for commentary on the impact of inflation on demand.

Asian Paints finished 2.69 per cent down and was among the top losers on the Nifty 50 after it reported a smaller-than-expected rise in quarterly profit on soft demand.