Post Session Commentary - Feb 19 2009

Indian market managed to end above the dotted line after swinging between positive and negative territory. Positive European markets along with firm US Index futures contributed to gain the sentiments. During the trading indices dropped on bleak domestic and global outlook. Ease in inflation number for the week ended 7th Feb that stood at 3.92% against 4.39% the week earlier was not able to bring any respite.

The domestic market opened marginally up on mixed cues from the markets all over the world. US stock markets on Wednesday ended on flat note on the back of a government plan to stem foreclosures and a restructuring plan from General Motors. Benchmark indices continued northward journey till mid session on buying sentiment. Though, investors were not able to hold the same momentum and market slipped to trade below dotted line. Further, market managed to recover but remained volatile on continuous bouts of buying and selling.

The rate sensitive sectors remained in the limelight during the early trading session on the rate cut hopes. The rate sensitive stocks got a boost today, on expectation of an interest rate cut by the Reserve Bank of India latter in the week. There are rumor in the markets that the RBI will announce a 50 basis points cut in lending rates. The RBI governor D Subbarao said that there is certain room to cut interest rates as the impact of global recession was much sharper than expected. During the trading, BSE Sensex slipped below 9,000 mark and finally ended around 9,050 level. Along with this, NSE Nifty closed above 2,750 level. From the sectoral front, significant buying was seen among IT, Teck, Consumer Durable, Auto Power and PSU stocks. However, Capital Goods, Reality, Bank, Metal, FMCG and Oil & Gas stocks remained out of favour. Midcap and Smallcap stocks also remained weak during the trading session.

Among the Sensex pack 18 stocks ended in green territory and 12 in red. The market breadth indicating the overall health of the market remained in favour of decliners as 1299 stocks closed in red while 1073 stocks closed in green and 104 stocks remained unchanged in BSE.

The BSE Sensex closed higher by 27.45 points at 9,042.63 and NSE Nifty ended slightly up by 13.2 points at 2,789.35. Broader market indices were in red as BSE Mid Caps and Small Caps ended with losses of 5.90 points and 11.96 points at 2,838.4 and 3,214.1 respectively. The BSE Sensex touched intraday high of 9,111.95 and intraday low of 8,977.96.

The government has sought the approval from the parliament to spend an extra Rs 10,765 crore during the current fiscal. This amount would be used to fund the additional spending due to raised wages of government staff and also to make payments to the funding institutions in the farm sector. The government would spend the net cash for meeting extra requirement of various government arms to implement the sixth pay commission recommendation on wage raise of government staff, compensation to state governments to introduce value added tax, administrative expenses and compensation to riot victims.

Inflation for the week ended 7th February 2009, fell to more than 13 months low of 3.92% against 4.39% the week earlier. The inflation was lower than 4.01% as expected by economists. The WPI for all commodities are down by 0.2% at 228(WoW).

Gainers from the BSE Sensex pack are Wipro Ltd (5.41%), Infosys Tech (2.50%), ACC Grasim Indus (2.43%), Maruti Suzuki (2.37%), HDFC (2.08%), M&M Ltd (1.97%), Tata TCS Ltd (1.91%) and JP Ranbaxy Lab (1.49%).

Losers from the BSE Sensex pack are Hindalco (3.49%), ACC Ltd (2.43%), ICICI Bank (2.13%), L&T Ltd (2.05%), HUL (1.66%), DLF Ltd (1.48%) and SBI (1.05%).

On the global markets front, the Asian markets, which opened before Indian market, ended mixed. The Bank of Japan said it will buy 1 trillion yen ($10.7 billion) in corporate bonds from financial institutions and extend lending programs to prevent a shortage of credit from deepening the recession. Shanghai Composite, Hang Seng and Nikkei 225 ended up by 17.26, 7.36 and 23.21 points at 2,227.12, 13,023.36 and 7,557.65 respectively. However Seoul Composite index and Straits Times ended down by 6.09 and 21.71 points at 1,107.1 and 1,629.35 respectively.

European markets which opened after the Indian market are trading in green. In London FTSE 100 is trading higher by 16.14 points at 4,022.97 and in Frankfurt the DAX index is trading up by 17.91 points at 4,222.87.

The BSE IT index advanced by (2.45%) or 50.17 points to close at 2,094.83 as Indian Rupee touched two months low during the trading. Tech Mahindra (12.34%), Wipro Ltd (5.41%), Infosys Tech (2.50%), TCS Ltd (1.91%) and Aptech Ltd (1.68%) ended in positive.

The BSE Teck stocks ended up by (1.71%) or 29.62 points at 1,757.01. Main gainers are Tech Mahindra (12.34%), Wire& Wirles (12.21%), Wipro Ltd (5.41%), IOL Net Com (4.80%) and Idea Cell (4.10%).

The BSE Consumer Durables index closed with increase of (1.12%) or 17.52 points at 1,581.4. Scrips that gained are Blue star L (4.84%), Videocon Ind (0.56%), Titan Ind (0.54%) and Gitanjali GE (0.22%).

The BSE Auto index advanced by (0.96%) or 24.37 points at 2,572.96 on hopes that lower interest rates will boost sales which are largely driven by finance. Main gainers are Amtek Auto (5.71%), Maruti Suzuki (2.37%), M&M Ltd (1.97%), Tata Motors (1.01%) and Ashok Leyland (0.92%).

The BSE Capital Goods index also lost ground and ended down by (0.93%) or 57.2 points at 6,071.56. Losers are Everest Kanto (4.79%), Bharat Bijli (3.88%), Elecon Eng C (2.83%), ABB Ltd (2.56%) and L&T Ltd (2.05%).

The BSE Reality index ended lower by (0.63%) or 9.33 points to close at 1,482.33. Mahindra Life (2.33%), Anant Raj (2.09%), Unitech Ltd (1.72%), Penland Ltd (1.52%) and DLF Ltd (1.48%) ended in negative territory.

Gayatri Projects Ltd ended with handsome gains of 9.99%. The Company has secured two new orders along with Ratna Infrastructure Projects Pvt. Ltd under Joint Venture namely (GAYATRI - RATNA JOINT VENTURE) with a total projects cost of Rs 2,131.62 crores. M/s. Gayatri Projects Ltd share is 80% and Ratna Infrastructure Projects Pvt. Ltd share is 20%. The entire works has to be executed with in a period of 54 months.

Suzlon Energy advanced 3% after its German unit REpower Systems AG bagged an order worth nearly 2 billion euro from RWE Innogy GmbH for supplying 250 offshore wind turbines.

Patni Computer Systems closed higher by 1.50%. The company announced an extended suite of services being offered by its Global Asset Management Practice in response to a radically changing financial services landscape. Patni''s solutions and services will aid financial services organizations and asset management institutions with containing costs, improving efficiencies and reducing risks during mergers and acquisitions, divestitures and conversions of internal IT systems that directly impact the overall technology infrast.