Post Session Commentary - Feb 27 2009

Indian market ended below the dotted line despite minimizing its losses during final trading hours. Upturn in key stocks mainly contributed to the recovery in the domestic bourses. Previously, benchmark indices tumbled during the session on disappointing Q3 2008 gross domestic product growth of 5.3%, which stood at slowest in five years. Weak global economic data also weighed on the sentiments as US jobless claims hit a 26-year high.

The market had gap down opening today on the back of weak cues from the markets all over the world. The US stocks on Thursday ended on downbeat note for the second day on the back of the President Obama’s budget plan. Jobless claims in US continued to rise beyond expectations. Initial claims climbed 36,000 to 667,000 from the prior week. Sentiments in domestic ground exhibited instability ahead of the release of Q3 GDP data by the government. Along with this, benchmark indices continued to hold sluggish movement on intense selling pressure over the counters. Further, lower December 2008, quarter GDP number that stood at 5.3% as against 8.9% on Year-on-Year basis and 7.6% on Quarter-on-Quarter basis also fueled the negative attitude. Finally, market pared its losses during last trading to lessen the negative gap on hopes of rate cut. BSE Sensex ended below 8,900 mark and NSE Nifty closed below 2,750 level. From the sectoral front, Reality, Oil & Gas, Teck, Consumer Durables, IT and Auto stocks remained under pressure. BSE Mid Cap and Small Cap stocks also followed the same trend. However, Bank, FMCG and Metal stocks were in limelight as witnessed most of the buying from these baskets.

Among the Sensex pack 22 stocks ended in red territory, 7 in green and 1 remained unchanged. The market breadth indicating the overall health of the market remained negative as 1320 stocks closed in green while 1043 stocks closed in red and 103 stocks remained unchanged in BSE.

The BSE Sensex closed lower by 63.25 points at 8,891.61 and NSE Nifty ended down by 22 points at 2,763.65. BSE Mid Caps and BSE Small Caps ended with losses of 1.17 points and 6.76 points at 2,758.29 and 3,106.01 respectively. The BSE Sensex touched intraday high of 8,944.11 and intraday low of 8,728.66.

Losers from the BSE Sensex pack are Grasim Indus (5.99%), Ranbaxy Lab (4.80%), Wipro Ltd (3.98%), Reliance Infra (3.71%), ACC Ltd (3.55%), ACC Ltd (3.38%) and ONGC Ltd (3.37%).

Gainers from the BSE Sensex pack are Tata Steel (5.61%), HDFC (4.75%), HDFC Bank (1.35%), ICICI Bank (1.03%), HUL (0.30%) and SBI (0.29%).

The government today released the third-quarter (October to December) GDP numbers that came in below expectations. The economy of India grew 5.3% for the quarter ended December from a year earlier, slowing from 7.6% in the previous quarter. The annual growth of India''s fiscal third quarter was lower than upwardly revised 8.9% annual expansion in the same quarter a year ago. The farm output in the December quarter fell an annual 2.2% as compared to a rise of 2.7% in September quarter. The manufacturing slipped an annual 0.2% in December quarter as against a growth of 5% in the September quarter. The construction grew 6.7% in December quarter as compared to 9.7% September quarter. The trade, hotels, transport and communication advanced 6.8% in December quarter vs 10.7% in September. The financing, insurance, real estate and business services gained 9.5% in Oct-Dec vs 9.2% in July-September.

On the global markets front the Asian markets which opened before the Indian market, ended mixed. Investors were worried about worsening economic and corporate profit prospects. Japan’s industrial output in January fell 10% from the preceding month, marking the fourth straight month of declines. Further the shipments are down 11.4%, the biggest on-month falls on record and the household-spending fell 5.9% year-on-year in January, marking its biggest decline in about two years. These data confirmed the bleak outlook for the world''s second biggest economy. Shanghai Composite, Hang Seng and Straits Times index ended lower 38.40, 83.37 and 22.57 points at 2,082.85, 12,811.57 and 1,594.87 respectively. However, Nikkei 225 and Seoul Composite closed up by 110.49 and 8.24 point at 7,568.42 and 1,063.03.

European markets which opened after the Indian market are trading down. In London FTSE 100 is trading lower by 70.68 points at 3,844.96 and in Frankfurt the DAX index is trading down by 83.55 points at 3,859.07.

The BSE Reality index ended down by (2.29%) or 33.09 points at 1,413.09. Losers are Akruti City (5.08%), Penland Ltd (3.78%), Mahindra Life (3.45%), Housing Dev (3.10%) and Unitech Ltd (2.59%).

The BSE Oil & Gas index closed with decrease of (1.64%) or 101.22 points at 6,064.11. Scrips that lost are Aban Offshore (9.42%), ONGC Ltd (3.37%), Reliance Nat Res (2.72%) and Reliance (1.97%).

The BSE Teck index also tumbled (1.40%) or 24.58 points to close at 1,736.47. Zee Ent (5.27%), IBN18 (4.30%), Wipro Ltd (3.98%), Idea Cell (3.89%) and Tech Mahindra (3.79%) ended in red.

The BSE Consumer Durables stocks lost (0.80%) or 12.45 points to close at 1,542.67. Main losers are Videocon Ind (1.48%), Titan Ind (1.28%), Blue star L (1%) and Gitanjali GE (0.91%).

The BSE IT index ended lower by (0.69%) or 14.52 points to close at 2,096.17 on fears that a weak global economy would cut the amount firm spent ton technology. Wipro Ltd (3.98%), Tech Mahindra (3.79%), Aptech Ltd (2.83%), Patni Computer (2.30%) and Mphasis Ltd (1.98%) ended in negative territory.

The BSE Bank index gained (1.31%) or 54.95 points at 4,240.10. Main gainers are Union Bank (4.90%), Oriental Bank (4.30%), Punjab National Bank (4.12%), Bank of Baroda (3.84%) and Canara Bank (2.64%).

Ranbaxy Labs extended its losses and ended lower by 4.80% as USFDA on 25 February 2009, said Ranbaxy falsified data of over two dozen drugs made in Poanta Sahib plant in India and it will halt approval of pending and new drugs from the plant.. Daiichi Sankyo said that it had formed a team with Ranbaxy Laboratories, to deal with the charges of data ''falsification'' levied by the US Food and Drug Administration (USFDA). Daiichi Sankyo said in a statement that the company takes the issue very seriously. "Both Daiichi and Ranbaxy have already formed a team to solve the issue".

Gujarat NRE Coke fell 1.45% despite it decided to issue 40,00,000 Convertible Warrants to non-promoter entity subject to the approval of the shareholders and in accordance with the provisions of Chapter XIII to SEBI Guidelines, 2000.

Cairn India rose 3.12%, as crude oil prices surged over 6% on the New York Mercantile Exchange on Thursday, 26 February 2009.