Post Session Commentary - Jan 22 2009

The Indian market managed to end the day in green terrain after showing choppiness during the trading session. Indices regained positive zone after slipping into red in a highly volatile session. The market gave up gains in afternoon trade on higher inflation data to 5.6% for the week ended January 10 from 5.24% a week earlier. Investors also eyed on the crucial quarterly number of the Reliance Industries. The company is likely to report dismal numbers due to the sharp fall in the demand of petrochemicals and the petroleum product prices. However, market regulator Sebi''s move asking promoters of listed companies to disclose there pledged shares, if any, with lenders boosted the market.

The domestic market today opened significantly higher tracking positive cues from the markets all over the world. Though, stocks were not able to sustain the same impetus and turned choppy as investors were cautious ahead of quarter earnings to be announced by the country’s most valuable listed company Reliance Industries. Nervousness prevailed the market despite an encouraging third quarter earnings announced by Bharti Airtel today. The rise in the inflation number also added to the choppiness. Further, market pared all its gains and slipped into red on account of profit booking seen in selective front liners. Finally, market recovered to get back some of its gains closed the directionless session above the dotted line on account of firm global cues. In the meantime, Planning Commission deputy chairman, Mr. Montek Singh Ahluwalia told the industry not to expect any more stimulus packages from government during this financial year ending March 2009. The government has already announced two stimulus packages to support the economy, reeling under the impact of the global slowdown. From the sectoral front, Teck, Bank, IT, and Oil & Gas stocks were on buyers ride today. However, Reality, Consumer Durable, Metal, Auto and Pharma stocks remained under pressure as witnesses most of the selling form these baskets. Midcap and Smallcap stocks also witnesses huge selling pressure during the trading.

Among the Sensex pack 15 stocks ended in red territory and 15 in green. The market breadth remained negative as 1661 stocks closed in red while 739 stocks closed in green and 96 stocks remained unchanged in BSE.

The BSE Sensex closed higher by 34.67 points at 8,813.84 and NSE Nifty ended slightly up by 7.65 points at 2,713.80. The BSE Mid Caps and Small Caps ended with losses of 61.03 points and 67.70 points at 2,895.45 and 3,304.95 respectively. The BSE Sensex touched intraday high of 8,927.69 and intraday low of 8,699.32.

Gainers from the BSE Sensex pack are Bharti Airtel (6.19%), Grasim Indus (3.05), Sun Pharma (2.78%), Sterlite In (2.77%), ICICI Bank (2.53%), ACC Ltd (2.43%), HDFC (2.04%), JP Associates (1.53%) and Reliance (1.21%).

Losers from the BSE Sensex pack are DLF Ltd (9.36%), Ranbaxy Lab (8.89%), Hindalco (7.49%), Rel Infra (6.15%), Tata Motors (5.21%), Tata Steel (5.01%), Maruti Suzuki (4.10%), L&T Ltd (3.31%) and M&M Ltd(2.86%).

India''s wholesale price index rose to 5.6% for the week ended January 10 2008, from 5.24% a week earlier after moving downward for few weeks. However the expectations prevail that the eight-day truckers strike in early January would have pushed up the food price index. The annual inflation rate was 4.36% during the corresponding week of the previous year.

According to provisional figures the wholesale price index of all commodities increased by 0.4% to 230 from 229 of the previous week. Along with this, the index for primary articles rose 1.2% to 249.3 as against 246.3 and for manufactured products went up by 0.2% to 201.1 from 200.6 of earlier week. However, the index for fuel, power, light and lubricants remained unchanged at its previous weeks’ level of 329.8.

On the global markets front, the Asian Markets ended higher despite economic concerns. Japan''s exports dropped for the third consecutive month in December to 35% from a year earlier. Markets got a boost on the back of sharp rise in the Wall Street, which overshadowed the region''s economies worries. The Bank of Japan (BOJ), as widely expected, held its key interest rate unchanged at 0.1% on Thursday, citing an increasingly worsening economic outlook at domestic and abroad. Meanwhile, the BOJ downgraded its estimates for the nation''s economic growth from the previously forecasted 0.1% to minus 1.8% in fiscal 2008, which ends in March 2009. For fiscal 2009, the central bank lowered its estimate for real GDP growth from earlier predicted 0.6% expansion to 2.0% contraction. Hang Seng index closed higher by 74.36 points at 12,657.99. Along with this, Nikkei, Straits Times and Seoul Composite index ended up by 150.10, 4.25 and 12.62 points at 8,051.74, 1,708.77 and 1,116.23 respectively.

The European Markets are also extending its gains. Major gainers are banking and energy stocks. Though, U.K. price inflation fell sharply in December to 3.1% as against 4.1% November. The DAX is up by 74.88 points at 4,336.03 and FTSE 100 is higher 75.18 points at 4,135.06.

The BSE Teck index witnessed most of the buying as ended up by (1.27%) or 21.83 points to close at 1,739.17 as Tanla (9.93%), Bharti Airtel (6.19%), Oracle Fin (3.92%), Zee News (3.24%), JAgran Prak (2.72%) and Deccan Chro (1.56%) ended in green.

The BSE Bank index gained (0.74%) or 34.46 points to close at 4,679.40 as investors speculated falling bond yields and lower rates would speed up loan growth and profitability of selective companies. Karnataka Bank (2.99%), ICICI Bank (2.53%), Bank of India (2.33%), Canara Bank (2.31%) and Axis Bank (1.96%) ended in positive territory.

The BSE Oil & Gas index also gained market favor and ended higher by (0.39%) or 21.97 points at 5,664. Gainers are Cairn Ind (2.86%) and Reliance (1.21%).

The BSE Reality index extended losses on reports that falling interest rates have failed to revive housing demand and ended down by (5.47%) or 89.78 points at 1,551.57. Major losers are DLF Ltd (9.36%), Anant Raj (4.94%), Indiabull Real (4.69%), Orbit Co (3.54%), Unitech Ltd (3.41%) and Housing Dev (2.88%).

The BSE Consumer Durable index also beaten down badly as heavy selling pressure was witnessed from this basket. It closed with decrease of (2.77%) or 49.16 points at 1,723.81. Scrips that lost are Gitanjali GE (6.72%), Blue Star L (5.51%), Titan Ind (2.46%) and Videocon Ind (1.18%).

The BSE Metal stocks tumbled (2.50%) or 117.24 points at 4,580.26 on fears that weakening domestic and global economy will hit demand. Main losers are Hindalco (7.49%), Jindal Saw (6.53%), Welspan Gujarat Sr (5.66%), Tata Steel (5.01%), Gujarat NRE C (3.52%) and JSW Steel (2.93%).

Bharti Airtel gained (6.19%) as reported good quarterly numbers in the third quarter. The company reported a 15% growth in quarter to quarter basis to Rs. 1976.4 crore versus Rs. 1,714.66 crore.