Post Session Commentary - Feb 4 2009

The Indian market managed to end the day in green territory after trimming most of its earlier gains as key indices slashed increase. Markets slipped from the days’ high during the final trading hours on the back of all round selling on the scrips across the sectors. Slower than expected direct tax collections also weighed on the sentiments. Though, market reported rise during initial trading on firm cues from the markets all over the world led by hoped that the US stimulus package will be approved.

The domestic market opened significantly higher due to positive cues from the global markets. The US stock market on Tuesday rose after a sharp three-day losing streak on the back of better than expected earnings from Merck and a rare positive report. Investors cheered the US Fed’s decision to extend its program to extend dollars to markets worldwide. Further, market continued to build up till afternoon on health buying over the ground. However, domestic market is still cautious due to a sharp contraction in January auto sales data of some major Indian auto makers. Finally, stocks cut most of its gains after a bit of volatility but still ended up. BSE Sensex ended above 9,200 mark and NSE Nifty closed around 2,800 level. From the sectoral front, most of the indices ended in green. The majority of buying was emerged among Metal, Reality, Oil & Gas, Teck, PSU, Power and FMCG stocks. However, Pharma and Consumer Durables stocks remained out of favour during the trading session. Midcap and Smallcap stocks also witnesses selling from these baskets.

Among the Sensex pack 19 stocks ended in green territory and 11 in red. The market breadth indicating the overall health of the market remained positive as 1278 stocks closed in green while 1148 stocks closed in red and 102 stocks remained unchanged in BSE.

The BSE Sensex closed higher by 52.55 points at 9,201.55 and NSE Nifty ended up by 19.15 points at 2,803.05. Broader market indices were in red as BSE Mid Caps and Small Caps ended with losses of 13.07 points and 0.94 points at 2,860.56 and 3,273.09 respectively. The BSE Sensex touched intraday high of 9,338.21 and intraday low of 9,164.16.

Gainers from the BSE Sensex pack are DLF (5.15%), Tata Steel (4.95%), JP Associates (4.68%), Sterlite Industries (4.41%), Maruti Suzuki (3.09%), ONGC Ltd (2.41%), RCom (2.35%), ACC Ltd (1.91%) and Bharti Airtel (1.41%).

Losers from the BSE Sensex pack are M&M Ltd (1.67%), Ranbaxy Lab (1.32%), Hindalco (1.12%), L&T Ltd (0.65%), ICICI Bank (0.54%), Reliance Infra (0.48%) and HDFC Bank (0.28%).

Planning Commission Deputy Chairman Montek Singh Ahluwalia said today that the Indian economy will need further stimulus in FY2010 and the government may revise its borrowing plan.

Direct tax collections increased in April-January, 2008-09, by a modest 11.9% to Rs 2,47,131 crore, which is much slower than the projected rate of 16.9% required to attain the target set in the budget. The Income Tax department has formed an intensive strategy to shore up collections and to ensure that budget target of Rs 3,65,000 crore is achieved, according to a senior income tax department official. The department has already raised an additional tax demand of Rs 1,24,401 crore after conducting a analysis of tax returns filed by taxpayers. The department managed to collect Rs 7,000 crore in the current financial year as compared to Rs 5790 crore in 2007-08, which shows that the collection of tax arrears is also on track.

On the global markets front, the Asian markets ended mostly higher on news about the housing market in the US and a recovery in the China’s manufacturing activity in January improved the outlook for the battered global economy. Though, investors remained concerned about corporate earnings for the next few quarters. The Japanese market rose on fund buying in cyclical shares. Shanghai Composite index, closed higher by 46.94 points at 2,107.75. Further, the Straits Times ended lower by 4.53 points at 1,707.39. However, Hang Seng, Nikkei 225 and Seoul Composite index ended up 287, 213.43 and 32.17 points at 13,063.89, 8,038.94 and 1,195.37respectively.

European markets are trading in green after firm performance of Wall Street. FTSE 100 is trading higher by 53.89 points at 4,218.35 and the DAX index is trading up by 49.42 points at 4,424.38.

The BSE Metal index closed with increase of (2.99%) or 143.69 points at 4,944.69 on the back of positive comments from Steel Minister Ram Vilas Paswan, who exuded confidence that India will become the world''s second-largest steel maker after China by 2015 as the steel companies are lined up with huge capacity expansion. China is the world''s largest consumer of industrial metals. Scrips that gained are Ispat Industries (12.41%), Ssa Goa Ltd (6.62%), JSW Steel (5.15%), Tata Steel (4.95%), Sterlite Industries (4.41%) and Steel Authority (3.94%).

The BSE Reality index rose on hopes lower rates will boost housing demand as ended up by (1.18%) or 16.30 points at 1,398.79. Major gainers are DLF Ltd (5.15%), Akruti City (3.48%), Sobha Dev (1.26%), Omaxe Ltd (1.07%) and Ansal Infra (0.63%).

The BSE Oil & Gas index ended higher by (0.73%) or 44.59 points at 6,190.18. Gainers are ONGC Ltd (2.41%), Gail India (1.76%), Cairn Ind (1.35%), HPCL (0.92%) and Reliance Natural Resources (0.66%).

The BSE Teck index rose on defensive buying and ended higher by (0.67%) or 11.91 points at 1,786.64. Main gainers are Wire & Wirles (77.43%), Dish TV (20.40%), Him Futr Com (4.91%) and Zee Enter (3.79%).

The BSE Consumer Durables index ended lower by (2.72%) or 45.10 points to close at 1,610.24. Titan Ind (4.60%), Gitanjali GE (2.09%), Videocon Ind (1.82%), Rajesh Export (0.21%) and Blue Star L (0.11%) ended in negative territory.

The BSE Pharma index tumbled (0.35%) or 9.25 points to close at 2,652.54 as Glenmark Pharma (7.55%), Divi’s Lab (2.59%), Matrix Labs (1.96%), Dishman Pharma (1.79%) and Orchid Chem (1.51%) ended in red.

BHEL increased by 1.28%. The company has entered into an understanding with Kerala Electrical and Allied Engineering Co Ltd (KEL) for setting up a joint venture (JV). The proposed venture will manufacture equipment such as wind power generators.

Reliance Communication jumped 2.35 reports the company plans to launch a cheaper variant of its wireless Internet service in rural areas.