Post Session Commentary - June 12 2008

Indian market made a smart recovery towards the final hours of the session to over come from the deep fall to close with modest gains due to better than expected industrial growth data. The IIP growth for the month of April 2008 stood at 7%, which was lower against 11.3% in the corresponding month of the previous year but better than 3.9% in the month of March 2008. The domestic market opened sharply lower and was trading downturn due to the repo rate hike by RBI and tracking weak global cues. Further it started making sharp recovery from the day lows after industrial production data released and bounced back smartly to close in green. Both Nifty and Sensex recovered from losses and maintained to close above 4,500 and 15,000 mark respectively. All crushed down stocks in the early session, recovered smartly during the late trade. From the sectoral front, Oil & Gas, Metal and Capital Goods stocks witnessed most of the buying interest. The market breadth was positive as 1,481 stocks closed in green while 1109 stocks closed in red.

The BSE Sensex closed higher by 64.88 points at 15,250.20 and NSE Nifty ended up by 15.75 points to close at 4,539.35. The BSE Mid Caps and Small Cap closed positive with increase of 32.78 points and 58.60 points at 6,223.50 and 7,525.90 respectively. The BSE Sensex touched intraday high 15,270.85 and intraday low of 14,747.99.

The Reserve Bank of India on Wednesday surprisingly raised repo rate by 25 basis points to 8% to curb inflation, and according to analysts more tightening is expected if inflation continued to head towards double digits. This hike is a signal of rise in interest rates, and corporates who were preparing to issue bonds to raise funds may hesitate to launch such offerings.

Gainers from the BSE are BHEL (2.52%), Reliance Infra (2.40%), Tata Steel (2.35%), SBI (2.31%), Wipro Ltd (2.11%), L&T Ltd (1.90%), JP Associates (1.67%), Bharti Airtel (1.61%), Reliance (0.96%) and Grasim Industries (0.83%).

Interest rate sensitive sectors like bank though faced the heavy selling across the counters but made a smart pull back towards the end as the investors showed some buying interest in selective scrips. The Bankex index closed up by 19.47 points at 7,037.89. Gainers are Bank Of Baroda (3.50%), Yes Bank (2.60%), Canara Bank (2.33%), SBI (2.31%) and Axis bank (1.72%).

The Auto index also made a smart come back ignoring the repo rate hike to close almost on a flat note. From this basket, TVS Motors (2.81%), Ashok Leyland (0.77%), M&M (0.64%) and Tata Motots (0.35%) closed in green.

The Oil & Gas index closed up by 142.70 points at 9,974.94. Gainers are Relaince Nat Res (7.02%), Aban Offshore (5.93%), Reliance Petroleum (4.89%), Essar Oil Ltd (4.17%), Gail India (1.10%), and Reliance (0.96%).

The Metal index increased by 107.84 points to close at 15,508.64. Major gainers are Ispat Industries (3.74%), Jindal Steel (3.74%), Jindal Steel (2.83%), Tata Steel (2.35%), Sesa Goa Ltd (1.99%) and Bhushan Steel (0.97%).

The Capital Goods Index closed higher by 88.22 points at 11,989.71. Gainers are Jyoti Struct (13.43%) along with Praj Industries (5.94%), Kir Oil Ltd (3.20%), BHEL (2.52%), Punj Lloyd (2.12%), Aiaengineer (2.07%) and Lakshmi Ma W (1.98%).

The Consumer Durables index closed up by 66.63 points at 3913.40. Gainers are Rajesh Exports (13.12%), Videocon India (2.68%), Titan India (0.81%), Lloyd Ele En (0.66%), and Gitanjali Ge (0.18%).

The IT index dropped by 11.61 points to close at 4,345.82 as Patni Computer (3.04%), HCL Tech (1.09%), Infosys Tech Ltd (0.89%), TCS Ltd (0.49%), and Rolta India (0.28%) closed in negative territory.

The Health Care index closed lower by 6.09 points at 4,441.15. Losers are Orchid Chem (3.14%), Ranbaxy Lab (3.08%), Nicholas Piramal (2.02%), Dr Reddy’s Lab (1.24%) and Glenmark Pharma (0.81%).