Post Session Commentary - Feb 26 2009

Indian market rebounded sharply from the day’s low to conclude the day with good gains on the back of considerable buying during final trading hours. Positive European markets along firm US index futures contributed to the recovery in the bourses. Along with hopes of further rate cut by RBI also added to the sentiments. However, earlier during the trading market was showing weakness with mild volatility following fragile cues from the global markets. Sharp slide in Chinese markets weighed on the domestic stocks during afternoon trade. Market was lower despite further ease in inflation number for the week ended 14th Feb 2009, to 3.36% as against 3.92% in the previous week.

The market opened on downbeat note tracking Wall Street losses overnight and mixed cues from the Asian markets. The US markets on Wednesday ended lower after dividend cuts triggered a sell-off in insurers and an unexpected drop in home sales dragged down industrial shares. The existing homes sales for January dropped 5.3%, their lowest level since 1997, to a seasonally adjusted annual rate of 4.49 million in January. Benchmark indices were exhibiting volatility ahead of the settlement of February F&O series today. Despite drop in inflation number for 14th Feb, market continued to hold the same impetus before taking U turn during last hours. Domestic market recovered on hopes of rate cut along with firm European markets. BSE Sensex ended above 8,950 mark and NSE Nifty closed above 2,750 level. From the sectoral front, upswing was mainly led by Auto, Oil & Gas, Teck, IT, FMCG, Power and Metal, stocks. However, Bank, consumer Durables and Reality stocks witnessed most of the selling from these baskets.

Among the Sensex pack 21 stocks ended in green territory and 9 in red. The market breadth indicating the overall health of the market remained negative as 1014 stocks closed in green while 1341 stocks closed in red and 94 stocks remained unchanged in BSE.

The BSE Sensex closed higher by 52.30 points at 8,954.86 and NSE Nifty ended up by 23.15 points at 2,785.65. BSE Mid Caps ended with gain of 2.48 points at 2,759.46 while BSE Small Caps closed with loss of 21.92 points at 3,112.77. The BSE Sensex touched intraday high of 8,998.31 and intraday low of 8,788.32.

Gainers from the BSE Sensex pack are Tata Motors (7.26%), Maruti Suzuki (5.02%), Grasim Indus (3.67%), RCom (2.88%), ONGC Ltd (2.66%), Sterlite Industries (2.37%) and NTPC Ltd (2.30%).

Losers from the BSE Sensex pack are Ranbaxy Laboratories (18%), ICICI Bank (4.63%), HDFC (3.41%), Hindalco (3.12%), Tata Power (1.81%) and SBI (1.31%).

India’s inflation has slipped to 14 month low mainly due to cheaper fuels, to 3.36% in the week ended Feb 14 as against 3.92% in the previous week. WPI for all commodities down by 0.1% to 227.8(week on week). The prices of manufactured products slipped 0.1% and prices of food articles were down 0.3% week on week.

On the global markets front the Asian markets which opened before the Indian market, closed lower tracking overnight losses in the Wall Street. Investors were worried about worsening economic and corporate profit prospects. Shanghai Composite, Nikkei 225, Hang Seng and Seoul Composite ended lower 85.32, 110.14, 3.29 and 12.29 points at 2,121.25, 12,894.94, 7,457.93 and 1,054.79 respectively. However Straits Times index closed slightly up by 0.65 point at 1,617.44.

European markets which opened after the Indian market are trading up as investors welcomed a UK government insurance scheme for banks'' assets. The UK government is ready to guarantee 600 billion pounds ($853 billion) of toxic bank assets to stabilize Royal Bank of Scotland and Lloyds Banking Group. In London FTSE 100 is trading higher by 42.66 points at 3,891.64 and in Frankfurt the DAX index is trading up by 27.33 points at 3,873.54.

The BSE Auto index ended up by (2.74%) or 71.92 points at 2,694.30 on reduction in excise duty to 8% from 10%. Gainers are Tata Motors (7.26%), Amtek Auto (7.20%), Maruti Suzuki (5.02%), Ashok Leyland (4.84%) and Bharat Forge (3.56%).

The BSE Oil & Gas index closed with increase of (1.28%) or 78.03 points at 6,165.33 as the index is expected to benefit from lower service tax on exploration & production activities which currently stands at 12.36%. Scrips that gained are ONGC Ltd (2.66%), Gail India (2.21%), Reliance (1.93%) and Cairn Ind (0.93%).

The BSE Teck index also gained (1.21%) or 21.10 points to close at 1,761.05. Mphasis Ltd (7.31%), IOL Netcom (4.74%), RCom (2.88%), Him Futr Com (1.84%) and Rolta Ind (1.71%) ended in green.

The BSE IT index ended higher by (1.14%) or 23.76 points to close at 2,110.69 as the Indian rupee plunged against dollar. Mphasis Ltd (7.31%), Oracle Fin (3.02%), Rolta Ind (1.71%), Infosys Tech (1.65%) and TCS Ltd (0.42%) ended in positive territory.

The BSE FMCG stocks gained (1.02%) or 20.49 points to close at 2,036.39. Main gainers are United Spr (6.41%), Tata Tea Ltd (3.37%), United Brew (2.70%), Dabur India (1.33%) and ITC Ltd (1.10%).

The BSE Bank index lost (2.15%) or 91.88 points at 4,185.15 on fears of rising defaults in a weakening economy. Main losers are Axis Bank (5.39%), Punjab National bank (5.07%), ICICI Bank (4.63%), IDBI Bank (3.96%) and Federal Bank (3.61%).

Tata Motors ended higher by 7.26%. The company has launched its Xenon XT (cross terrain), a five-seater pickup. Along with this, the company announced that it will launch ‘Nano’ in Mumbai on 23rd March 2009. Bookings for the world’s cheapest family car will start from April. The car was exposed at the auto expo in January 2008 in Delhi and it will be launched commercially at a function on 23rd March.

Everest Kanto Cylinder ended with gains of 6.76%. The company has informed that Cp Industries Holdings, Inc., (CPI) step down wholly owned subsidiary of the Company in USA has received orders totaling USD 5.8 Million from National Oilwell Varco, Rig Solutions Group. In addition, a Letter of Intent has also been received for supply of large pressure vessels for an additional USD 7.2 Million.

RCom has advanced by 2.88% after on reports that the company is planning raise Rs130bn debt in the next three months to meet certain capex requirements and scheduled debt repayment obligations.

L&T dropped marginally by 0.27%. L&T’s buildings and factories operating company, part of its construction division has bagged new orders worth around Rs. 11.62 bn in the fourth quarter of the current financial year for construction of factories and residential projects. The company has bagged a major design & builds order from the Andhra Pradesh Rajiv Swagruha Corporation Ltd valued at Rs. 6.05 bn for the construction of an integrated thematic township.