Post Session Commentary - Feb 24 2009

Indian market ended slightly below the dotted line after trimming most of its earlier losses on expectations that RBI may cut policy rates to support the economy. Along with this reports that the government is ready to cut excise duty beyond March 2009, also added to the sentiments. Besides, firm US index futures too contributed to the recovery. Earlier, during the trading, concern over global financial systems after steep losses on the US market, took huge beating on the bourses. Stocks slipped on news that Standard & Poor''s, global rating agency revised the outlook on the long-term sovereign credit rating on India to negative from stable.

The domestic market today opened on weak note tracking negative cues from the markets all over the world. The US markets on Monday plunged to their lowest levels in nearly 12 years due to uncertainties about the recent US government action to shore up struggling banks. Benchmark indices were lower on intense selling pressure led by fresh worries over the global financial system. However, market was showing sign of recovery on hope of duty cuts. Finance Minister, Pranab Mukherjee is ready to cut excise duty by additional 2% and to cut service tax to 10%. FM has cut excise duty on bulk cement to 8%, which will be applicable beyond March 31. He also said states will be allowed to borrow 3.5% of GSDP in FY10. Stocks recovered sharply to minimize its initial losses during final hours contributed by short covering ahead of monthly derivative expiry on 26th February 2009. BSE Sensex ended below 8,850 mark and NSE Nifty closed below 2,750 level. From the sectoral front, most of the selling was seen in Metal, Bank, PSU, Pharma, Capital Goods, Tack and IT stocks. However, Consumer Durables, FMCG, Auto and Oil & Gas stocks remained in limelight as witnessed most of the buying from these baskets.

Among the Sensex pack 17 stocks ended in red territory and 13 in green. The market breadth indicating the overall health of the market remained weak as 1613 stocks closed in red while 790 stocks closed in green and 90 stocks remained unchanged in BSE.

The BSE Sensex closed lower by 21.15 points at 8,843.21 and NSE Nifty ended slightly down by 2.55 points at 2,733.90. Broader market indices were in red as BSE Mid Caps and Small Caps ended with losses of 49.27 points and 44.48 points at 2,742.45 and 3,116.11 respectively. The BSE Sensex touched intraday high of 8,856.52 and intraday low of 8,619.22.

Losers from the BSE Sensex pack are HDFC (4.78%), Tata Steel (4.46%), Sun Pharma (1.94%), Sterlite Industries (1.85%), SBI (1.75%), TCS Ltd (1.57%), Wipro Ltd (1.44%) and Tata Motors (1.23%).

Gainers from the BSE Sensex pack are M&M Ltd (4.92%), Ranbaxy Lab (3.94%), Gasim Indus (3.01%), DLF Ltd (1.48%) and HUL (1.46%).

On the global markets front the Asian markets which opened before the Indian market, closed lower with Shanghai Composite, Nikkei 225, Hang Seng, Seoul Composite and Straits Times index are trading down by 105.12, 376.58, 107.60, 16.25 and 35.67 points at 2,200.65, 12,798.52, 7,268.56, 1,614.44 and 1,063.88 respectively. Asian stocks tumbled sharply on the back of a sharp fall in the US markets.

European markets which opened after the Indian market are also trading down. In London FTSE 100 is trading lower by 41.95 points at 3,808.78 and in Frankfurt the DAX index is trading down by 100.63 points at 3,835.82.

The BSE Metal stocks closed down by (2.31%) or 108.40 points at 4,584.07 on worries that weakening economy may reduce technology spending. Main losers are JSW Steel (6.54%), Tata Steel (4.46%), Steel Authority (4.22%), Welspan Gujarat SR (4.09%) and Jindal Saw (3.47%).

The BSE Bank index lost (1.36%) or 58.52 points at 4,240.39 due to the fears of rising defaults in present economic condition. Main losers are Karnataka Bank (6.86%), Indian Overseas Bank (6.27%), Allahabad Bank (5.08%), Punjab National Bank (4.70%) and Bank of Baroda (3.61%).

The BSE PSU index also ended down by (0.71%) or 35.42 points at 4,931.06. Losers are Syndicate (14.58%), Andhra Bank (7.27%), J&K Bank (6.81%), Indian Overseas Bank (6.27%) and St Trad Corp (5.78%).

The BSE Pharma index ended lower by (0.53%) or 13.78 points to close at 2,582.49. Wockhardt Ltd (6.80%), Dishman Pharma (6.10%), Aurobindo Pharma (4.90%), Bil care Ltd (4.04%) and Biocon Ltd (3.48%) ended in negative territory.

The BSE Consumer Durable index gained (0.73%) or 11.47 points to close at 1,575.60. Titan Ind (3.25%) ended in green.

The BSE FMCG index closed with increase of (0.21%) or 4.25 points at 2,012.82. Scrips that gained are HUL (1.46%), Tata Tea Ltd (1.38%) and ITC Ltd (0.28%).

ICICI Bank is ended lower by 0.13%. The bank said that it will go even slower in disbursing auto loans, unless there is clarity on the repossession norms for vehicles. The bank on an average disbursed around Rs 900 crore every month as vehicle loans in 2007-08. In the current fiscal, this figure has come down to about Rs 400-450 crore.

Nagarjuna Construction Company lost 2.75% on reports Andhra Pradesh state government has cancelled a Rs. 1,000-crore project awarded to a consortium led by the company for building a multi-utility complex in New Delhi.

Tata Metaliks ended down by 0.56%. At present the company is reviewing its expansion project in West Bengal on similar grounds that Tata Motors relocated its Nano project from the state to Gujarat. The West Bengal Industrial Development Corporation (WBIDC), which has been acquiring land in Kharagpur for Tata Metaliks'' diversification project, has already started discussion with the company. But land prices remain a contentious issue.

ONGC gained 1.17% despite fall in crude oil prices. Oil prices extended declines on Tuesday, sliding toward $38 on growing economic worries after US stocks slumped to a 12-year low at the previous day''s close.

M&M Ltd gained 4.92%. The company is increasing Xylo production due to increase in its demand with five weeks wait in period. Booking of Xylo have crossed the 4,000 mark since launch.