Post Session Commentary - Jan 21 2009

The Indian market ended the day with huge losses as investors’ confidence was smashed on concerns that the global economic crisis may last longer than expected. The fresh selling by the foreign institutional investors also weighted on sentiments. Market reported losses second day in line led by sign of crises in the financials overseas.

The domestic market today opened sharply lower for the second straight day on the back of negative cues from the global markets. Further, market had shown some recovery on few bouts of buying. However, benchmark indices were not able to carry the momentum and constantly followed the southward journey. Market continued to trade in deep red and slipped sharply during final trading hours on renewed selling led by worries over weaker financial results from corporate and growing recession pressure. Sell-off in European markets also fueled to negative sentiment. The BSE Sensex ended below 8,800 mark and NSE Nifty ended around 2,700 level. From the sectoral front, most of the indices ended in red. Among those, Power, Bank, Oil & Gas, Metal, Teck, Capital Goods and Reality stocks took huge beating on the bourses. Midcap and Smallcap stocks also remained under pressure. However, FMCG stocks witnesses buying from its basket.

Among the Sensex pack 28 stocks ended in red territory and 2 in green. The market breadth remained in favor of declines as 1669 stocks closed in red while 720 stocks closed in green and 104 stocks remained unchanged in BSE.

The BSE Sensex closed lower by 321.38 points at 8,779.17 and NSE Nifty ended down by 90.45 points at 2,706.15. The BSE Mid Caps and Small Caps ended with losses of 59.50 points and 66.44 points at 2,956.51 and 3,372.65 respectively. The BSE Sensex touched intraday high of 9,051.31 and intraday low of 8,734.93.

Losers from the BSE Sensex pack are Sterlite Industries (7.97%), HDFC (7.49%), Tata Power (7.32%), ICICI Bank (7.12%), Grasim Industries (5.96%), Reliance Infra (5.72%), Reliance (5.33%), Bharti Airtel (5.16%), Ranbaxy Lab (4.73%), DLF Ltd (4.44%), Tata Motors (3.91%) and RCom (3.57%).

Only two gainers from the BSE Sensex pack are HUL (3.39%) and ITC Ltd (0.15%).

Higher prospects for hopes about the steps that new US administration would follow to deal with the growing banking crisis and faltering economy were dampened after the inauguration speech by Barack Obama concluded with little new information to digest. On Jan 20, US President Barack Obama riding to power with a message of hope and promise of change said that the nation is in the middle of a crisis and there are serious challenges, which will be met.

On the global markets front, the Asian Markets ended lower on Wednesday, led by banks, after U.S. stocks closed sharply lower overnight on renewed concerns about the financial sector. Along with this, mining stocks slipped after miners announced plans to cut jobs as well as production, indicating a deepening recession. Global miner BHP Billiton is expected to slash 6,000 jobs and close its giant mine in Australia. Hang Seng index closed lower by 376.14 points at 12,583.63. Along with this, Nikkei, Straits Times and Seoul Composite index ended down by 164.15, 18.85 and 23.20 points at 7,901.65, 1,704.52 and 1,103.61respectively.

The European Markets are trading down tracking Wall Street losses over night, where investor murkiness about the financial sector''s prospects remained persistent. The DAX is down by 86 points at 4,153.85 and FTSE 100 is lower 83.44 points at 4,007.96.

The BSE Metal stocks declined on worries that weakening domestic and global economy has hit the demand and ended lower by (4.07%) or 199.29 points at 4,697.50. Main losers are Sterlite Industries (7.97%), Steel Authority (6.54%), Hindustan Zinc (4.97%), Gujarat NRE C (4.83%), Sesa Goa Ltd (4.59%) and Welspan Gujarat SR (3.93%).

The BSE Power index that witnessed most of the buying yesterday, but underperformed the benchmark indices today as ended with deep cut of (3.91%) or 70.56 points to close at 41,732.53 as Neyveli LIG (9.36%), Torrent Power (7.56%), Tata Power (7.32%), Power Grid (6.46%), Suzlon Energy (4.32%) and Siemens Ltd (4.22%) ended in red.

The BSE Bank index tumbled (3.91%) or 188.87points to close at 4,644.94 tracking rickety cues from global financial sector crisis. ICICI Bank (7.12%), Yes Bank (4.76%), Bank of India (4.38%), Indus Ind Bank (4.31%) and Federal Bank (4.11%) ended in negative territory.

The BSE Oil & Gas index hammered continuously for second day and ended lower by (3.78%) or 221.56 points at 5,642.03. Losers are Reliance Natural Resources (5.65%), Reliance (5.33%), Aban Offshore (3.62%), HPCL (2.08%), Reliance Pet (2.07%) and IOC Ltd (1.78%).

The BSE Reality index also followed the southward journey on reports that falling interest rates have failed to revive housing demand and ended down by (3.61%) or 61.42 points at 1,641.35. Major losers are Mahindra Life (6.22%), Indiabull Real (5.93%), Housing Development (4.94%), Parsvnath (4.61%), DLF Ltd (4.44%) and Unitech Ltd (3.93%).

The BSE FMCG index was in limelight as buying was seen from this basket and ended higher by (0.84%) or 16.49 points at 1,979.56. Scrips that gained are HUL (3.39%), Colgate Palm (1.85%), Nestle Ltd (0.31%), United Spr (0.27%) and ITC Ltd (0.15%).

Wipro Ltd ended lower by (3.55%). The tech giant has announced the Audited Consolidated results for the quarter ended December 31, 2008. It reported 3.51% rise in net profit to Rs.1,003.90 crore for the Oct-Dec quarter compared with Rs.969.80 crore in the previous quarter. However the net profit rose 18% on a year-on-year basis.