Post Session Commentary - Feb 13 2009

Strong buying over the ground led the Indian market to close the day with handsome gains. Rally in the domestic bourses was mainly contributed by the hopes from the interim budget with measures to stimulate the economy, due to be presented on 16th Feb 2009. Up to now government had announced two stimulus packages including tax cuts and the capital injections for banks. Sustained buying since initial bell got a boost after the announcement of the interim railway budget for 2009-10 by the Union railway minister Lalu Prasad Yadav. Along with this positive signs from the markets worldwide also added to the optimistic sentiments.

The domestic market today opened higher ahead of interim Railway Budget today along with tracking positive cues from the global markets. The US stock market on Thursday closed mixed after rebounding 3% from the day’s low on the back of a report that the U.S. government is considering a new plan to subsidize mortgage payments for homeowners. Further, benchmark indices continued to gain ground with holding initial gains as all sectors responded positive to interim Railway Budget. Firm cues from the domestic arena along with all over the world, contributed to the healthy closing of the market. BSE Sensex ended above 9,600 mark and NSE Nifty closed around 2,950 level. From the sectoral front, most of the indices ended in green. Among those, most of the buying was seen in Metal, Auto, Capital Goods, Bank, Power, Oil & Gas and Reality stocks. Midcap and Smallcap stocks also went up during the trading session. However, Pharma stocks remained out of favor.

Among the Sensex pack 27 stocks ended in green territory and 3 in red. The market breadth indicating the overall health of the market remained strong as 1484 stocks closed in green while 947 stocks closed in red and 100 stocks remained unchanged in BSE.

The BSE Sensex closed higher by 168.91 points at 9,634.74 and NSE Nifty ended up by 55.30 points at 2,948.35. Broader market indices were in green as BSE Mid Caps and Small Caps ended with gains of 44.84 points and 20.79 points at 3,012.95 and 3,395.58 respectively. The BSE Sensex touched intraday high of 9,695.59 and intraday low of 9,540.60.

Gainers from the BSE Sensex pack are M&M Ltd (7.04%), RCom (5.33%), ACC Ltd (5.13%), Tata Steel (4.69%), BHEL (3.86%), Reliance Infra (3.51%), JP Associates (3.55%), ICICI Bank (3.10%), SBI (2.98%), Reliance (2.90%), DLF Ltd (2.78%) and L&T Ltd (2.77%).

Only three lossers from the BSE Sensex pack are Sun Pharma (3.45%), Ranbaxy Lab (0.33%) and Infosys Tech (0.29%).

Railway Minister Lalu Prasad Yadav presented the interim railway budget 2009-10 in the parliament today. In his Interim railway budget speech he said that the Indian Railways has earned a profit of Rs. 90,000 crores in the last five years. He also said that the average freight grew by 3-8% in the last five years and has claimed that the Railway has raised debt of USD 100 million at 4%. The budget announced a cut in AC and mail express trains by 2% and the introduction of 43 new trains. The freight rates kept unchanged. Further the Railways to spend Rs 23,000 crore in 2009-10.

On the global markets front, the Asian markets ended in green on Wall Street bounce back. Shares reversed three sessions of losses to gain today on hopes that government efforts worldwide, including talk of a U.S. subsidy for mortgage payments, would soften the blow of the global downturn. Shanghai Composite index and Hang Seng closed higher by 72.70 and 326.37 points at 2,320.79 and 13,554.67 respectively. Besides, Nikkei 225, Straits Times and Seoul Composite index ended down by 74.04, 20.68 and 12.6 points at 7,779.40, 1,705.64 and 1,192.44 respectively.

European markets which opened after the Indian market are also trading firm led by financials on news of the U.S. subsidy plan. FTSE 100 is trading higher by 63.50 points at 4,265.74 and the DAX index is trading up by 75.84 points at 4,483.40.

The BSE Metal stocks out performed the benchmark indices as ended up by (2.80%) or 143.76 points Nalco (5.82%), Tata Steel (4.69%), Jindal Steel (3.90%), Steel Authority (3.48%), JSW Steel (3.15%) and Sterlite Industries (2.44%).

The BSE Capital Goods index closed with increase of (2.48%) or 158.47 points at 6,547.42. Scrips that gained are SKF India (4.85%), Usha Martin (4.05%), BHEL (3.86%), Kalpat Power T (3.62%), Siemens Ltd (3.05%) and Suzlon Energy (2.97%).

The BSE Reality index ended higher by (2.29%) or 35.67 points to close at 1,592.36 on hopes the government would step up spending on infrastructure projects. Anant Raj (4.94%), DLF Ltd (2.78%), Unitech Ltd (2.41%), Housing Dev (2.04%), Pheonix Mill (2.00%) and Indiabull Real (1.87%) ended in positive territory.

The BSE Power index also ended higher by (2.28%) or 41.30 points at 1,852.78. Gainers are RPower (4.90%), BHEL (3.86%), GVK Power (3.76%), Reliance Infra (3.51%), Power Grid (3.14%) and Siemens Ltd (3.05%).

The BSE Auto index ended up by (2.24%) or 57.16 points at 2,612.22 on hopes the government may announce some tax sops to the automobile sector in the forthcoming interim budget. Main gainers are M&M Ltd (7.04%), Apollo Tyre (2.91%), Maruti Suzuki (2.62%), Exide Industries (2.20%) and MRF Ltd (1.99%).

The BSE Pharma index dropped by (0.43%) or 11.70 points to close at 2,711.56. Sun Pharma (3.45%), IPCA Lab (1.59%), Bil Care (1.30%), Wockhardt (0.88%) and Dr Reddy’s Lab (0.79%) ended in red.

Siemens ended higher by 3.05%. The company has received a Rs. 212 crore order from Steel Authority of India Ltd (SAIL) to provide a power distribution package at the Rourkela Steel Plant (RSP) in Orissa. The order includes designing, engineering, supply, civil work, erection, testing and commissioning of transmission lines and substations.

Reliance Infra is closed up by 3.51% after announcing a program for buy-back of equity shares for an aggregate amount of up to Rs. 700 crore, as approved by the shareholders of the company. The buy back will remain open up to mid April 2009 and will be made up to a maximum price of Rs 700 per share, a premium of 27% to the current market price.