Post Session Commentary - Feb 5 2009

Market sentiments remained weak during the trading session that led the Indian market to close in red terrain due to the unfavorable global markets. Most of the Asian markets slipped into red after a gap up opening and European markets were also trading on down beat note. Significant selling by the foreign investors also weighed on the sentiments. Drop in inflation number after continuous two weeks rise, to 5.07% for the week ended Jan 24 2009, from 5.64% of the previous week, also failed to bring any respite.

The domestic market today opened slightly higher but soon after start turned volatile following Wall Street losses overnight along with mixed cues from the Asian markets. The US stock market on Wednesday knock down with Dow Jones closed below the 8K mark on the back of disappointing earnings results from Walt Disney and Kraft Foods that over shadowed the better than expected economic reports. Investors were edgy also on account of heavy selling by foreign investors. Further, benchmark indices continued to lose ground without any sign of recovery on the back of heavy selling pressure. Decline in inflation number failed to lift the sentiments and market remained directionless. During final trading hours, though market tried to recover but was unable to depart the red terrain. BSE Sensex ended below 9,100 mark and NSE Nifty closed below 2,800 level. From the sectoral front, investors off-loaded their position on majority of indices. Among those, Auto, Consumer Durable, IT, Capital Goods, Teck, Oil & Gas and Reality stocks contributed to most of the selling pressure. Midcap and Smallcap stocks also lost ground during the trading session. However, Metal and Pharma stocks remained in limelight as witnessed most of the buying from these baskets.

Among the Sensex pack 22 stocks ended in red territory and 8 in green. The market breadth indicating the overall health of the market remained negative as 1459 stocks closed in red while 1001 stocks closed in green and 108 stocks remained unchanged in BSE.

The BSE Sensex closed lower by 110.97 points at 9,090.88 and NSE Nifty ended down by 23 points at 2,780.05. Broader market indices were weak as BSE Mid Caps and Small Caps ended with losses of 18.46 points and 27.79 points at 2,842.10 and 3,245.30 respectively. The BSE Sensex touched intraday high of 9,247.09 and intraday low of 9,017.08.

Losers from the BSE Sensex pack are Sterlite Industries (5.71%), M&M Ltd (5.69%), MAruti Suzuki (4.07%), HDFC (3.66%), TCS Ltd (3.27%), Tata Motors (2.77%), L&T Ltd (2.57%), RCom (2.14%) and Hindalco (1.92%).

Gainers from the BSE Sensex pack are Grasim Industries (3.13%), Tata Steel (1.59%), Ranbaxy Lab (1.36%), ACC Ltd (0.64%), ICICI Bank (0.35%) and ITC (0.25%).

Inflation for the week ended 24th January 2009, declined to 5.07% against 5.64% the previous week. The WPI for all commodities slid 0.2% at 230.1 on a week-on-week basis. The WPI for manufactured products was also down 0.5% on a week-on-week basis.

On the global markets front, the Asian markets ended mostly lower. Shanghai Composite index, Nikkei 225, Straits Times and Seoul Composite index ended down by 9.73, 89.29, 2.79 and 17.49 points at 2,098.02, 7,949.65, 1,704.6 and 1,177.88 respectively. However, Hang Seng closed higher by 115.01 points at 13,178.9. Investors were cautious as Dow Jones Industrial Average on Wednesday closed below 8000 mark for only the third time this year, amid concerns about fading U.S. consumer demand. However, shares of shipping companies got a boost on news that China may announce stimulus package for shipbuilders soon that will include a reduction in age limit of vessels. Meanwhile, China approved a government stimulus plan for the textile and machinery industry. Further there are reports that the government is considering measures including raising export tax rebates and lending help.

European markets are trading in red tracking Wall Street losses overnight. FTSE 100 is trading lower by 16.70 points at 4,211.9 and the DAX index is trading down by 29.99 points at 4,462.8.

The BSE Auto index fell ended lower by (1.98%) or 48.9 points at 2,416.68 as higher interest rates and sluggish consumer spending have dented demand for automobiles, including for cars, trucks, motorcycles, scooters and three-wheelers. Main losers are M&M Ltd (5.69%), Tata Motors (2.77%), Maruti Suzuki (4.07%) and Exide Industries (1.61%).

The BSE Consumer Durables index ended lower by (1.88%) or 30.24 points to close at 1,580. Gitanjali GE (3.19%), Blue Star L (2.89%) and Titan Ind (2.39%) ended in negative territory.

The BSE IT index tumbled (1.86%) or 40.95 points to close at 2,155.05 after NASSCOM cut export growth target for the current year. NIIT Ltd (4.78%), TCS Ltd (3.27%), Tech Mahindra (2.41%), Oracle Fin (2.16%) and Wipro Ltd (1.90%) ended in red.

The BSE Capital Goods index closed with decrease of (1.47%) or 89.8 points at 6,017.11. Scrips that lost are ABB Ltd (5.59%), Usha Martin (4.43%), Gammon Indi (3.77%), Lakshmi MA W (2.80%), L&T Ltd (2.57%) and Kalpat Pow T (2.49%).

The BSE Metal stocks extended gains on firm price movement on the London Metal Exchange as ended up by (0.15%) or 7.41 points at 4,951.90. Scrips that gained are Sesa Goa Ltd (5.80%), Steel Authority (3.72%), Jindal Steel (2.44%), Hindustan Zinc (2.13%), Ispat Industries (1.62%) and Tata Steel (1.59%).

The BSE Pharma index also ended higher by (0.03%) or 0.73 points at 2,653.27. Gainers are Dishman Pharma (3.05%), Lupin Ltd (2.79%), Pfizer Ltd (1.89%), Ranbaxy Lab (1.36%) and Apollo Hos E (1.54%).

Tata Motors fell by 2.77% as it owes more than Rs. 1,200 crore in unpaid dues to its suppliers and vendors.

BHEL decreased by 0.52%. The company has dropped acquisition plans of an East European firm that make coaches and engines for its technology. Meanwhile it is close to bags an order worth Rs8bn from the Indian Railways for manufacturing 150 electric locomotives.

ACC Ltd ended marginally up by 0.64%. The Company has posted a net profit of Rs 12127.843 million for the year ended December 31, 2008 where as the same was at Rs 14385.870 million for the year ended December 31, 2007. Total Income is Rs 75973.332 million for the year ended December 31, 2008 where as the same was at Rs 71681.656 million for the year ended December 31, 2007. The company board have recommended payment of final dividend at the rate of 10/- (Rupees Ten only) per equity share of Rs 10/- each. Along with the Interim Dividend of Rs 10 per share paid earlier, the total dividend for the year is Rs 20/- (Rupees Twenty only) per share.

United Spirits advanced by 5.61% after the news flows that the world''s biggest alcohol drinks group Diageo, reportedly wants more than the initial less-than-15% stake in offered in the company.