Post Session Commentary - Feb 3 2009

The Indian market today bounced back and closed with gains led by sustained buying in key stocks backed by favorable global cues. The market ended off the day’s high as a weak economic outlook kept investors wary. Most of the Asian markets rose on account of bank and technology shares Japan and Australia widened efforts to revive economic growth. Firm opening of European markets also supported the sentiments initially, which further turned negative.

The domestic market opened higher after strong sell off yesterday tracking positive cues from the Asian markets. Though, market was not able to continue the same momentum and turned choppy on continuous bouts of buying and selling. Along with this, yesterday’s negative sentiments also put an impact on today’s performance. Further, benchmark indices managed to gather impetus since mid session and continued to gain ground as fresh buying was witnessed among the scrips. This was also supported from the fact of firm trading in major global indices. BSE Sensex ended above 9,100 mark and NSE Nifty closed around 2,800 level. From the sectoral front, most of the buying was witnessed in Oil & Gas, FMCG, IT, Tech and Bank stocks. However, Reality, Consumer Durables, Pharma Metal and Auto stocks remained under pressure. Midcap and Smallcap stocks also contributed to the selling pressure during the trading session.

Among the Sensex pack 20 stocks ended in green territory and 10 in red. The market breadth indicating the overall health of the market remained negative as 1339 stocks closed in red while 1074 stocks closed in green and 101 stocks remained unchanged in BSE.

The BSE Sensex closed higher by 82.60 points at 9,149.30 and NSE Nifty ended up by 17.25 points at 2,783.90. Broader market indices were in red as BSE Mid Caps and Small Caps ended with losses of 22.28 points and 13.92 points at 2,873.63 and 3,274.03 respectively. The BSE Sensex touched intraday high of 9,302.75 and intraday low of 9,040.56.

Gainers from the BSE Sensex pack are Grasim Industries (7.15%), ACC Ltd (5.10%), Maruti Suzuki (3.06%), BHEL (2.36%), Reliance (1.96%), Wipro Ltd (1.84%), ITC Ltd (1.83%) and ICICI Bank (1.77%).

Losers from the BSE Sensex pack are DLF Ltd (13.25%), Tata Motors (6.41%), Hindalco (2.82%), NTPC Ltd (2.35%), M&M Ltd (1.10%), Tata Steel (0.99%) and L&T Ltd (0.60%).

On Feb 2, India signed a key safeguards agreement with IAEA to allow inspection of additional civilian reactors, clearing the hits for supply of atomic fuel and technology by the international community after a 34-year-old nuke trade embargo that was lifted in 2008. The deal between the government of India and the UN atomic watchdog for the ''Application of Safeguards to Civilian Nuclear Facilities'' was inked in Vienna by IAEA Director General Mohamed ElBaradei and Indian Amabassador Saurabh Kumar.

On the global markets front, the Asian markets ended firm. Shanghai Composite index, closed higher by 49.12 points at 2,060.81. Further, the Hang Seng and Nikkei 225 ended lower by 84.6 and 48.47 points at 12,776.89 and 7,825.51 respectively. However, Straits Times and Seoul Composite index ended up 6.63 and 16.25 points at 1,711.92 and 1,163.20 respectively. Asian markets rose modestly but trimmed their early gains, as optimism over billions of dollars in new stimulus measures in Japan and Australia gave way to concerns about the sputtering global economy. Japanese shares got a jolt despite the Bank of Japan said it would buy 1 trillion yen ($11.2 billion) in corporate shares held by financial institutions to help shore up capital at commercial banks, who''ve taken a beating from volatile equities markets. But the rally soon fizzled. Australia’s central bank cut its benchmark interest rate by 100bps to the lowest 9in 45 years and the government announced it would spend another A$42bn.

European markets are trading in red as FTSE 100 is trading lower by 30.36 points at 4,047.42 and the DAX index is trading down by 33.46 points at 4,237.58.

The BSE Oil & Gas index ended higher by (1.44%) or 87.39 points at 6,145.59 on rise of crude oil prices. Gainers are Cairn Ind (2.05%), Reliance (1.95%), ONGC Ltd (1.65%), Reliance Pet (1.59%) and BPCL Ltd (1.52%).

The BSE FMCG index rose on defensive buying and ended higher by (1.01%) or 20.43 points at 2,040.32. Main gainers are Ruchi Soya (2.30%), ITC Ltd (1.83%), HUL (1.07%) and Dabur India (1.03%).

The BSE IT index also gained the market favour and closed with increase of (0.66%) or 14.32 points at 2,195.04. Scrips that gained are Oracle Fin (4.03%), Oracle Fin (3.84%), Aptech Ltd (2.25%), Wipro Ltd (1.84%), TCS Ltd (1.62%) and Patni Computer (0.59%).

The BSE Reality index slipped on recent reports that falling interest rates have failed to boost housing demand as ended down by (7.59%) or 113.48points at 1,382.49. Major losers are DLF Ltd (13.25%), Indiabull Real (8.94%), Housing Dev (6.39%), Mahindra Life (5.80%), Anant Raj (5.00%) and Orbit Co (4.33%).

The BSE Consumer Durables index ended lower by (2.85%) or 48.60 points to close at 1,655.34. Rajesh Export (4.95%), Titan Ind (4.50%), Gitanjali GE (2.84%), Blue Star L (0.57%) and Videocon Ind (0.17%) ended in negative territory.

The BSE Pharma index tumbled (0.72%) or 19.38 points to close at 2,661.79 as Glenmark Pharma (5.89%), Aurobindo Pharma (4.75%), BIL Care (4.18%), Stelite Biotec (3.62%) and Dr reddys Lab (2.31%) ended in red.

Ashok Leyland shares grew by 0.58%. India’s second biggest truck maker plans to cut capex by as much as 39% in the next three years as a slowing economy hurts demand for commercial vehicles. The company also added that it would spend Rs20bn against planned Rs33bn and would also reduce its intended capacity for new factory.

Educomp shares plunged 12.28%. The corporate affairs minister Prem Chand Gupta asked the registrars of companies (RoCs) to inspect the books of accounts of Educomp after media reports stated that the company’s profits were inflated.

Indiabulls Securities Ltd ended lower by 4.14%. The company has informed BSE that the Board of Directors of the Company at its meeting held on February 02, 2009, has approved the proposal for Buy- back of Equity Shares of the Company under sub-section (2) of Section 77A of the Companies Act, 1956. The proposed Buy-back will be from the open market through stock exchanges at a price not exceeding Rs 33/- per equity share with total aggregate consideration for the Buy-back limited to Rs 83.18 crores, being 25% of the total paid up capital and free reserves as per audited balance sheet of the Company for the year ended March 31, 2008.