Post Session Commentary - Jan 27 2009

The Indian market ended with handsome gains on significant buying over the ground led by positive global cues along with short covering ahead of expiry of January 2009 contracts on 29th Jan 2009. Though, there was a bit of negative reaction to the Reserve Bank of India’s decision to keep interest rates unchanged. But suddenly the key indices had witnessed a sharp recovery to trigger a solid rally.

The domestic market today opened notably higher as US markets overnight gains amid expectations of stimulus and a strong start to the Asian markets boosted the domestic sentiments. The investors were closely watching RBI’s quarterly review of monetary policy and benchmark indices comes off from the day''s high after the central bank’s announcement of maintaining its status quo on interest rates. Further, market gained its wining momentum once again on strong buying in key stock. Stocks extended their gains and displayed firmness throughout the day on positive global cues. Key benchmark indices surged to day''s high during last trading hours, on firm trading in the US index futures. BSE Sensex maintained its strength and breached the 9,000 level along with NSE Nifty ended above 2,750 mark. From the sectoral front, all indices ended in green and among those most of the buying momentum was seen among Metal, Power, Teck, IT, Oil & Gas, Bank, Reality and Auto stocks. Midcap and Smallcap stocks also joined the buyers’ radar.

Among the Sensex pack 28 stocks ended in green territory and 2 in red. The market breadth remained positive as 1217 stocks closed in green while 1168 stocks closed in red and 100 stocks remained unchanged in BSE.

The BSE Sensex closed higher by 329.73 points at 9,004.08 and NSE Nifty ended up by 92.80 points at 2,771.35. The BSE Mid Caps and Small Caps ended with gains of 17.68 points and 11 points at 2,867.87 and 3,266.54 respectively. The BSE Sensex touched intraday high of 9,021.97 and intraday low of 8,789.06.

Gainers from the BSE Sensex pack are Sterlite Indus (11.84%), Reliance Infra (11.14%), Reliance Communications (7.15%), Sun Pharma (6.15%), NTPC Ltd (5.99%), Ranbaxy Lab (5.87%), Wipro Ltd (5.75%), Bharti Airtel (5.21%) and JP Associates (5.12%).

Only two losers from the BSE Sensex pack ONGC Ltd (3.84%) and L&T Ltd (0.41%).

The Reserve Bank of India in its policy review for the third-quarter of financial year 2008-09 has maintained a status quo on key policy rates after aggressively easing its monetary stance since October has kept the key rates unchanged. The central bank left its repo rate at 5.5%, reverse repo rate at 4% and the cash reserve ratio (CRR) at 5% unchanged on Tuesday. The Bank Rate has been kept unchanged at 6%. The bank, however, cut its growth forecast for the fiscal year ending March due to a slowdown in industry and services and assuming normal agricultural production. It cuts its GDP growth projection for 2008/09 to 7% with a downward bias from 7.5-8%. The economy has grown at 9% or more for the past three fiscal years. It also adds that inflation will fall to 3% by the end of March from earlier forecast of 7%.

On the global markets front, the Asian Markets ended firm after the government said it would offer funds to firms whose capital has been hurt by the financial turmoil. Tokyo launched a $16.7 billion scheme on Tuesday to help firms threatened by the financial crisis. Today among major stock markets in Asia, only Nikkei was trading while all other Asian markets were closed due to Lunar New Year. Markets in Singapore and South Korea will reopen on Wednesday. Hong Kong''s markets will reopen on Thursday. Japan’s Nikkei ended with gain of 378.93 points (4.93%) at 8,061.07.

The European Markets are trading in negative with losses from mineral extractors pressuring the top index. Mineral extractors dropped as gold and other metal futures fell. The DAX is down by 15.03 points at 4,311.84 and FTSE 100 is lower 49.05 points at 4,159.96.

The BSE Metal stocks outperformed the benchmark indices and ended higher by (5.55%) or 245.64 points at 4,672.64 due to firm commodities prices on London Metal Exchange. Main gainers are Jindal Steel (12.52%), Sterlite Indus (11.84%), Hindustan Zinc (9.11%), Sesa Goa Ltd (6.52%), JSW Steel (3.94%) and Tata Steel (3.58%).

The BSE Power index also supported the buying sentiment as ended up by (4.66%) or 79.48 points at 1,784.93. Major gainers are Reliance Infra (11.14%), NTPC Ltd (5.99%), Siemens Ltd (5.28%), ABB Ltd (4.57%), BHEL (4.57%) and Power Grid (3.25%).

The BSE Teck index was able to gain market favor and gained (4.39%) or 74.96 points to close at 1,783.44 as Oracle Fin (15.64%), Rolta Ind (12.16%), Reliance Communications (7.15%), Zee Ent (6.58%), Wipro Ltd (5.75%) and Bharti Airtel (5.21%) ended in green.

The BSE IT index rose on firm movement of Indian ADRs overnight in the US and closed with increase of (4.05%) or 83.74 points at 2,152.88. Scrips that gained are Oracle Fin (15.64%), Rolta Ind (12.16%), Wipro Ltd (5.75%), HCL Tech (5.14%), Aptech Ltd (4.14%) and Infosys tech (3.97%).

The BSE Oil & Gas index advanced by (3.35%) or 190.42 points at 5,868.90 as traders focused on short-term factors like cold U.S. weather and an Australian cyclone, despite forecasts of a further rise in U.S. crude stocks. Gainers are Reliance (6.41%), Cairn Ind (6.17%), Essar Oil Ltd (5.53%), BPCL (5.06%), Reliance Pet (4.03%) and Reliance Natural Resources (3.95%).

The BSE Bank index ended higher by (2.91%) or 130.56 points to close at 4,615.22 as investors speculated falling bond yields and lower rate would accelerate loan growth and profitability of selective company. Bank of Baroda (5.81%), ICICI Bank (4.68%), SBI (4.50%), IDBI Bank (3.45%) and Axis Bank (2.71%) ended in positive territory.