Post Session Commentary - Feb 9 2009

The Indian market today rallied sharply to close on firm note on sustained buying over the ground. Expectation from interim budget to be announced on 16th Feb, with initiatives to revive the drooping growth, supported the domestic bourses after official estimates showed that India’s economic growth is expected to slip to 6 year lower at 7.1% in fiscal 2008/09. However, some Asian markets slipped into negative on growing worries about a US rescue bank plan after its announcement was postponed.

The domestic market today opened on pleasant note backed by positive global cues as US markets ended higher on previous session and Asian markets were opened mixed. The US stock market on Friday surged on optimism over the government fiscal stimulus plan, which surpassed the worst January nonfarm payrolls data. However, investors were little cautious ahead of estimation of FY09 GDP data today. Further, benchmark indices managed to gather the momentum after a bout of profit booking and continued to gain ground on hopes from interim budget though, India’s expected economic slips to 6 year lower at 7.1%. Finally, market ended with sharp gains on huge buying during final trading hours. BSE Sensex breached 9,500 mark and NSE Nifty closed above 2,900 level. From the sectoral front, investors on-loaded their positions across the indices. Among those, Metal, Consumer Durable, Capital Goods, Oil & Gas, Bank, Power, PSU and Reality stocks witnessed most of the buying from these baskets. Midcap and Smallcap stocks also gained ground during the trading session.

Among the Sensex pack 29 stocks ended in green territory and 1 in red. The market breadth indicating the overall health of the market remained strong as 1562 stocks closed in green while 910 stocks closed in red and 83 stocks remained unchanged in BSE.

The BSE Sensex closed higher by 283.03 points at 9,583.89 and NSE Nifty ended up by 76.8 points at 2,919.9. Broader market indices were strong as BSE Mid Caps and Small Caps ended with gains of 49.15 points and 53.47 points at 2,931.95 and 3,332.71 respectively. The BSE Sensex touched intraday high of 9,601.56 and intraday low of 9,329.23.

Gainers from the BSE Sensex pack are JP Associates (8.48%), Tata steel (7.20%), Reliance Infra (6.81%), Sterlite Industries (6.21%), ONGC Ltd (5.95%), ONGC Ltd (5.59%), HDFC (5.55%), ICICI Bank (5.17%) and Hindalco (3.97%).

Only loser from the BSE Sensex is HUL (0.27%).

The Congress led union government will reveal an interim railway budget on 13th February 2009 followed by a mini general budget on 16th February 2009, ahead of national elections due by May 2009. A full budget for 2009-2010 will come only after a new government takes over. Foreign Minister Pranab Mukherjee, who is also responsible for finance and will present the mini budget, said on Friday, the government would take measures to boost growth, especially in sectors where jobs are at stake.

The Central Statistical Organization (CSO) on 9 February 2009 said that the India''s projected GDP growth for the year ending March 2009 observed at 7.1%, the slowest in six years and below the previous year''s 9%. The CSO said manufacturing output growth was estimated at an annual 4.1%, half of the expansion in 2007/08 while farm output is seen at annual 2.6%, much lower than 14.9% growth in last year. Along with this, the construction growth seen at 6.5% as against 10.1% of previous year and mining growth at 4.7% as against 3.3% a year ago.

On the global markets front, the Asian markets ended mixed and most markets in Asia gave up some of their gains by the afternoon after the postponement of a US bank rescue plan offset optimism spurred by a massive US stimulus package to bolster the economy. Shanghai Composite index Hang Seng closed higher by 43.48 and 114.02 points at 2,224.71 and 13,769.06 respectively. However, Nikkei 225, Straits Times and Seoul Composite index ended down by 107.59, 33.01 and 7.57 points at 7,969.03, 1,682.34 and 1,202.69 respectively.

European markets which opened after the Indian market are trading mixed as investors are waiting the approval of Washington''s massive stimulus plan and bank rescue package. FTSE 100 is trading higher by 37.18 points at 4,266.11 and the DAX index is trading down by 11.37 points at 4,633.26.

The BSE Metal stocks out performed the benchmark indices as ended up by (4.41%) or 225.41 points at 5,327.88 as copper surged more than 8% on the London Metal Exchange on 6th January 2009 on hopes for an economic recovery in China. Scrips that gained are NMDC Ltd (8.14%), Welspan Gujarat SR (7.33%), Tata Steel (7.20%), Gujarat NRE C (6.83%), JSW Steel (6.60%) and Sterlite Industries (6.21%).

The BSE Consumer Durables index ended higher by (3.69%) or 59.70 points to close at 1,679.49. Gitanjali GE (11.45%), Titan Ind (5.40%), Rajesh Export (3.53%), Videocon Ind (0.81%) and Blue Star L (0.41%) ended in positive territory.

The BSE Capital Goods index closed with increase of (3.59%) or 217.58 points at 6,286.98. Scrips that gained are Alstom Proje (12.83%), BEML Ltd (7.82%), Punj Lloyd (6.81%), L&T Ltd (5.59%), Praj Indus (4.58%) and Cromton Greaves (3.34%).

The BSE Oil & Gas index ended higher by (3.37%) or 213.61 points at 6,547.47. Main gainers are ONGC Ltd (5.95%), Reliance Pet (3.59%), Aban offshore (3.41%), Aban Offshore (3.39%) and Reliance Natural Resources (2.92%).

The BSE Bank index also ended higher by (3.19%) or 151.81 points at 4,915.51 on hopes from interim budget and also on firm bond prices. Gainers are ICICI Bank (5.17%), Axis Bank (4.72%), Indus Ind Bank (3.16%), Kotak Bank (2.75%) and SBI (2.61%).

The BSE Power index advanced by (2.85%) or 50.84 points to close at 1,806.68. GMR Infra (11.39%), GVK Power (11.08%), Reliance Infra (6.82%), Lanco Infra (5.82%), Tata Power (3.43%) and Cromton Greaves (3.34%) ended in green.

BEML ended higher by 7.82%. The company has bagged prestigious order from Bangalore Metro Rail Corporation Ltd for the supply of 150 metro coaches valued around Rs.1672.50 crore. Its is also likely to get an additional order for 63 Metro Coaches for further expansion and extension of proposed metro lines in Bangalore. The first set of coaches will be delivered by October 2010 for test purposes. The metro coahes will be manufactured at its Bangalore complex.

Gujarat NRE Coke ended up by 6.83%. The company has decided to raise funds by issue of Non-Convertible Debentures with Warrants upto Rs10bn through the Qualified Institutional Placement.

Reliance Industries Ltd rose 3.39% on reports the petroleum ministry is seeking re-introduction of the seven-year income-tax holiday for natural gas producers in an attempt to make the next round of NELP (New Exploration and Licensing Policy) bidding attractive.

BHEL advanced by 2% after the company has bagged orders worth Rs.70bn from NTPC, NCL and Mahagenco.