Post Session Commentary - Feb 2 2009

The Indian market closed in deep red backed by weak global cues following renewed concerns about the deteriorating state of the US economy. The government data last week showed that the US economy contracted at its fastest pace in over two decades. Sentiment was also weighed down by a survey that showed Indian manufacturing activity fell for a third straight month in January as faltering business and consumer confidence and a sharp global slowdown crimped demand.

The domestic market today belled the day on negative note on the back of negative cues from the markets all over the world. Further, the disappointing earnings results from the realty majors DLF and Unitech also added to the negative sentiments. Further, benchmark indices continued to plunge and extended its losses to touch the day’s low during last trading hours. Finally, market ended the day with huge losses as the sentiment received a jolt due to weak trend in Asian markets. Lower European markets also fueled the negative sentiments. Along with this, US stock futures were pointing to a weak opening on Wall Street later today. BSE Sensex extended its losses to more than 3% and ended below 9057 mark along with NSE Nifty ended below 2,800 level. From the sectoral front, investors off-loaded their position across the sectors and among those Reality stocks under performed the benchmark indices as ended with deep cut of more than 10%. Besides, Metal, Bank, Consumer Durables, Power, Oil & Gas, Teck and Capital Goods stocks contributed to most of the selling pressure. Midcap and Smallcap stocks also remained under pressure during the trading session.

Among the Sensex pack 29 stocks ended in red territory and 1 in green. The market breadth indicating the overall health of the market remained negative as 1577 stocks closed in red while 867 stocks closed in green and 83stocks remained unchanged in BSE.

The BSE Sensex closed lower by 357.54 points at 9,066.70 and NSE Nifty ended down by 100.15 points at 2,766.65. Broader market indices were also down as BSE Mid Caps and Small Caps ended with losses of 45.56 points and 51.10 points at 2,895.91 and 3,287.95 respectively. The BSE Sensex touched intraday high of 9,363.58 and intraday low of 9,048.97.

Losers from the BSE Sensex pack are JP Associates (17.90%), DLF Ltd (13.64%), Reliance Infra (10.50%), ICICI Bank (7.54%), HDFC (7.37%), Tata Steel (6.63%), RCom (6.29%), Hindalco (6.01%), SBI (4.91%) and Wipro Ltd (4.76%).

Only gainer from the BSE Sensex is HUL (0.17%).

The government today said that the exports dropped 1.1% to $12.7bn in December from a year earlier. India''s merchandise exports fell for a third month in a row in December due to continued decline in demand from its top overseas markets like the United States and European Union (EU). Imports in December climbed 8.8% to $20.3bn, widening the trade deficit to $7.6bn.

On the global markets front, the Asian markets ended lower except Shanghai Composite index, which closed higher by 21.03 points at 2,011.68. However, the Hang Seng, Nikkei 225, Straits Times and Seoul Composite index ended lower by 416.72, 120.07, 41.18 and 15.16 points at 12,861.49, 7,873.98, 1,705.29 and 1,149.95 respectively. China after a week-long holiday edged higher on the back of the Prime Minister’s positive remarks about the economy. He said that he saw signs of recovery in the Chinese economy, though further stimulus measures might be needed. However, the survey by brokerage CLSA reported that China''s manufacturing output declined in January for the sixth month in a row. The PMI index stood at 42.2, rising slightly from 41.2 in December. The reading is the third biggest fall on record, following declines in December and November. Japanese shares came into pressure today on the back of grim company’s earnings outlook.

European markets are following the weak Asian markets and are trading in red as FTSE 100 is trading lower by 89.96 points at 4,059.68 and the DAX index is trading lower by 106.96 points at 4,231.39.

The BSE Reality index slipped on recent reports that falling interest rates have failed to boost housing demand as ended down by (10.32%) or 172.11 points at 1,495.97. Major losers are DLF Ltd (13.45%), Housing Dev (12.43%), Indiabull Real (12.08%), Ansal Infra (9.59%), Unitech Ltd (9.02%) and Orbit Co (6.31%).

The BSE Metal index dropped on investors’ worries after weak results posted by the metal firms on fall in demand round the globe and ended lower by (5.34%) or 272.38 points at 4,827.76. Main losers are Steel Authority (7.91%), JSW Steel (6.90%), Tata Steel (6.63%), Hindalco (6.01%), Sesa Goa Ltd (5.96%) and Jindal Steel (5.28%).

The BSE Bank index fell on fears of rising default in a weakening economy and closed with decrease of (5.11%) or 250.48 points at 4,649.48. Scrips that lost are Axis Bank (8.16%), Oriental Bank (7.84%), ICICI Bank (7.54%), SBI (4.91%), Kotak Bank (3.65%) and Bank of India (3.63%).

The BSE Consumer Durables index ended lower by (4.16%) or 73.90 points to close at 2,473.26. Blue Star L (5.28%), Titan Ind (4.29%), Rajesh Export (4.17%), Videocon Ind (2.36%) and Gitanjali GE (1.79%) ended in negative territory.

The BSE Power index tumbled (3.59%) or 64.39 points to close at 1,727.96 as ABB Ltd (5.01%), Reliance Infra (10.50%), Reliance Power (6.34%), Suzlon Energy (5.92%), ABB Ltd (5.15%) and Power Grid (4.82%) ended in red.

The BSE Oil & Gas index ended tumbled (3.11%) or 194.26 points at 6,058.20. Losers are Reliance Natural Resources (7.59%), Reliance Petroleum (5.44%), Cairn India (5.13%), Reliance (3.60%) and Aban Offshore (3.09%).

DLF lost 13.54%. The company posted a fall of 70.6% in net profit to Rs 1780.60 million for the quarter ended December 31, 2008 as compared to Rs 6058.40 million for the quarter ended December 31, 2007. Total Income has decreased from Rs 18125.90 million for the quarter ended December 31, 2007 to Rs 6833.90 million for the quarter ended December 31, 2008. The consolidated results for the Quarter ended December 31, 2008- The Group has posted a net profit of Rs 6707.90 million for the quarter ended December 31, 2008 as compared to Rs 21449.80 million for the quarter ended December 31, 2007. Total Income has decreased from Rs 36512.50 million for the quarter ended December 31, 2007 to Rs 15027.90 million for the quarter ended December 31, 2008.

Unitech Ltd ended down by 9.02% as reported a 74.12% fall in consolidated net profit after tax to Rs 1,360.50 million for the quarter ended Dec. 31, 2008 as against Rs 5,257.80 million in quarter ended Dec. 31, 2007. The consolidated net sales fell 57.15% to Rs 4,893.9 million for quarter ended Dec. 31, 2008 as against 11,421 million for quarter ended Dec. 31, 2007.

Essar Oil ended lower by 2.90%. The company posted a net loss of Rs (12300) million for the quarter ended December 31, 2008 as compared to net loss of Rs (140) million for the quarter ended December 31, 2007.