Post Session Commentary - Jan 7 2009

The Indian market closed in deep red after going through strong blood bath during the trading session on shocking revelation that Satyam Computers founder and Chairman Ramalinga Raju had resigned from the Satyam board and admits big fraud of Rs 5,040 crore. His announcement that the balance sheet of the company was over stated on 30th Sept 2008, crash down the company’s stocks and shake the market.

The domestic market belled the day on positive note on firm cues from the global markets. Reports that state-run banks are likely cut lending rates further next month, also contributed to the firm trading in earlier session. Soon after, disclosure by Satyam chairman that the company had inflated its earnings over the past few years rattled the market. Further, stocks continued to trade in the southward direction without any sign of recovery on heavy selling pressure witnessed across board. Finally, continuous steep fall forced the market to end with huge losses. BSE Sensex ended below 9,600 mark and NSE Nifty below 3,000 level. From the sectoral front, investors off-loaded positions across the sectors and Reality stocks underperformed the benchmark indices as ended with deep cut of around 17%. Realty shares slumped on reports recent steps taken by the government to boost the housing sector are not enough to boost housing demand. Besides, Oil & Gas, IT, Bank, Teck, Capital Goods, Metal and Consumer Durables stocks contributed to the most of selling. Midcap and Smallcap stocks also remained under pressure.

Satyam Computer Services'' chairman and founder B. Ramalinga Raju resigned on Wednesday amid a scandal over inflated profit reporting. The balance sheet of Satyam has inflated, where in the cash balances of Rs 5040 crore as against Rs 5361 crore reflected in the books and accrued interest of Rs 376 crore is non-existent. Rs 1230 crore was arranged to Satyam and is not reflected in the books and as an over stated debtor position of Rs 490 crore as against Rs 2651 reflected in the books.

In BSE, Satyam Computer Services Ltd today opened at 179.10 and further touched the intraday high of 188.70 and intraday low of 30.70 during the trading session. Finally it closed at 39.95, which was 139.15 points or (77.69%) down as against the previous close of 179.10.

Among the Sensex pack 25 stocks ended in red territory and 5 in green. The market breadth remained extremely negative as 2111 stocks closed in red while 414 stocks closed in green and 57 stocks remained unchanged in BSE.

The BSE Sensex closed lower by 749.05 points at 9,586.88 and NSE Nifty ended down by 192.40 points at 2,920.40. The BSE Mid Caps and Small Caps ended with losses of 247.05 points and 246.03 points at 3,197.91 and 3,662.52 respectively. The BSE Sensex touched intraday high of 10,469.72 and intraday low of 9,510.15.

Losers from the BSE Sensex pack are Satyam Computers (77.69%), JP Associates (29.15%), Reliance Communication Ltd (17.02%), DLF Ltd (16.15%), Reliance Infra (13.14%), Reliance (12.52%), ICICI Bank (10.53%), L&T Ltd (8.60%), HDFC Bank (8.12%) and Ranbaxy Lab (7.04%).

Gainers from the BSE Sensex pack are HUL (1.95%), Infosys Tech (1.67%), Maruti Suzuki (0.53%), Wipro Ltd (0.23%) and Grasim Industries (0.13%).

The BSE Reality index ended lower by (16.95%) or 401 points at 1,965.20. Main losers are Housing Dev (21.45%), Indiabull Real (21.37%), Unitech Ltd (20.70%), Ansal Infra (17.73%), Orbit Co (16.81%) and DLF Ltd (16.15%).

The BSE Oil & Gas index tumbled (9.35%) or 613.42 points to close at 5,944.41 as Reliance Natural Resources (13.53%), Reliance (12.52%), Essar Oil Ltd (10.64%), Aban Offshore (9.99%), Reliance Petroleum (7.74%) and Gail India (5.74%) ended in red.

The BSE IT index lost (9.32%) or 218.66 points to close at 2,128.16 as Satyam Computers (77.69%), Aptech Ltd (24.56%), NIIT Ltd (17.45%), HCL Tech (15.09%), Tech Mahindra (14.57%) and Moser Bayer(13.91%) ended in negative territory.

The BSE Bank index plunged (8.06%) or 481.05 points at 5,489.24 Losers are Indus Ind bank (12.59%), ICICI Bank (10.53%), Yes Bank (9.98%), HDFC Bank (8.12%), PNB (7.80%) and IDBI Bank (7.36%).

The BSE Teck index ended down by (7.77%) or 154.60 points at 1,834.37. Major losers are Satyam Computers (77.69%), Aptech Ltd (24.56%), Tanla (19.98%), Adlabs Films (17.46%) and NIIT Ltd (17.45%).

The BSE Capital Goods index lost (6.72%) or 504.73 points to close at 7,008.77. Major losers are Suzlon Energy (22.95%), Punj Lloyd (14.29%), Praj Indus (12.70%), Gammon Indi (12.39%), Walchand In (12.10%) and Reliance Industrial Infra (11.74%).