Post Session Commentary - March 12 2009

Indian market gained sharply today after 2 days of holiday tracking the Wall Street gains. Investors ignored weak industrial production data for January 2009, which stood at -0.5 per cent as against -0.6 per cent in December 2008. However, the domestic market also got the support from the drastic fall in India''s annual inflation rate that dropped to six and a half year low to 2.43% for the week ended February 28 against 3.03% previous week.

The domestic market opened on pleasant note on the back of positive cues from US markets during two days local holiday. Wednesday, the US stock markets ended flat after a sharp solid start. The financial stocks rallied as investors were carried away by the government plans to stabilize banks. Benchmark indices continued to gain ground on sustained buying over the ground. Upward movement was also supported by lower inflation number for the week ended 28th February 2009. Further, strong sentiments overlooked negative IIP data for January 2009. Market maintained its northward journey till end despite negative opening of European markets. BSE Sensex ended above 8,300 mark and NSE Nifty above 2,600 level. From the sectoral front, traders on-loaded position in majority of the sectors. Besides, most of the buying was witnessed in Auto, Bank, Oil & Gas, Metal, IT, FMCG and Capital Goods stocks. BSE Mid Cap and Small Cap stocks also followed the same trend. However, Consumer Durables and Teck stocks remain out of favour as observed most of the selling from these baskets.

Among the Sensex pack 25 stocks ended in green territory and 5 in red. The market breadth indicating the overall health of the market remained strong as 1262 stocks closed in green while 1162 stocks closed in red and 99 stocks remained unchanged in BSE.

The BSE Sensex closed higher by 183.35 points at 8,343.75 and NSE Nifty ended up by 44.3 points at 2,617.45. BSE Mid Caps and BSE Small Caps ended with gains of 10.91 points and 10.59 points at 2,564.40 and 2,877.27 respectively. The BSE Sensex touched intraday high of 8,439.71 and intraday low of 8,274.78.

Gainers from the BSE Sensex pack are ICICI Bank (8.10%), Sterlite Industries (7.26%), Tata Motors (6.77%), Maruti Suzuki (5.83%), Sun Pharma (4.78%), RCom (4.57%), Reliance (4.17%), ACC Ltd (4.15%) and HUL (4.09%).

Losers from the BSE Sensex pack are Bharti Airtel (6.37%), Tata Power (2.52%), NTPC Ltd (1.56%), DLF Ltd (01.33%) and Ranbaxy Lab (0.41%).

For January 2009, industrial production stood at -0.5 per cent as against -0.6 per cent in December 2008. The December figure of (-2.2) per cent has now been revised to (-0.6) per cent. This is the third time in this fiscal that industrial growth has turned negative on account of sharp drop in demand both overseas as well as domestic markets. The IIP number stood at 6.18 per cent for the corresponding period of previous year.

India''s inflation for the week ended 28th February 2009, slipped below 3 per cent as stood at 2.43 per cent as against 3.03 per cent in the previous week. This is the lowest level for inflation since June 2002. However, wholesale price index (WPI) for all commodities, increased 0.04 per cent to 227.7 as compared to 227.6 on a week-on week basis. The annual inflation rate was 6.21 per cent during the corresponding week of the previous year.

On the global markets front the Asian markets which opened before the Indian market, ended lower amid renewed worries about the economy. Japan’s economy contracted at 3.2% in the three months to December and 12.1% on an annualized basis as the global downturn choked off demand for cars, high-tech goods and other exports. Shanghai Composite, Nikkei 225, and Straits Times index ended lower by 5.14, 177.87 and 11.98 points at 2,133.88, 7,198.25 and 1,493.53 respectively. However, Hang Seng gained 70.87 points at 12,001.53.

European markets which opened after the Indian market are trading in red. In London FTSE 100 is trading lower by 63.90 points at 3,629.91 and in Frankfurt the DAX index is trading down by 99.87 points at 3,814.23.

The BSE Auto index ended up by (3.70%) or 96.12 points at 2,695.27 as Indian automakers are confident of weathering economic storm. Gainers are Escorts Ltd (15.62%), Tata Motors (6.77%), Bharat Forge (5.86%), Maruti Suzuki (5.83%) and Herohonda Motor (4.19%).

The BSE Bank index closed with increase of (3.33%) or 120.99 points at 3,754.22 gained on hopes lower interest rates may boost lending growth. Scrips that gained are Axis Bank (8.35%), ICICI Bank (8.10%), Indian Overseas Bank (5.87%), Karnataka Bank (4.65%) and Bank of India (4.56%).

The BSE Oil & Gas index ended higher by (3.21%) or 180.76 points to close at 5,814.64. Reliance (4.17%), Reliance Petroleum (4.09%), Gail India (3.97%), ONGC Ltd (2.46%) and Reliance Natural Resources (1.58%) ended in positive territory.

The BSE Metal index also gained (2.87%) or 127.40 points to close at 4,566.46. Sterlite Industries (7.26%), Sesa Goa Ltd (5.13%), Hindalco (3.96%), Sterlite Industries (3.27%) and Tata Steel (2.40%) ended in green.

The BSE Consumer Durable stocks lost (1.30%) or 19.12 points to close at 1,452.44. Main losers are Blue Star L (2.15%), Rajesh Export (1.75%), Videocon Ind (1.31%) and Titan Ind (1.10%).

The BSE Teck index lost (0.09%) or 1.43 points at 1,634.12. Losers are Sun TV (6.96%), Tel18 (3.66%), Rolta Ind (3.67%), Bharti Airtel (6.37%) and IOL Netcom (6.35%).
Sterlite Industries advanced by 7.26% as the company has signed a new agreement with Asarco, a copper mining company of the US to buy its operating assets for $1.7 billion. This deal is viewed as an opportunity for geographic diversification in the US market by Sterlite, which is a subsidiary of London-based Vedanta Resources.

Tata Motors gained 6.77% as it has entered into a tie-up with State Bank of Mysore provide an added facility of car finance to its customers. This facility will be available at all branches of State Bank of Mysore and 329 sales touch points of Tata Motors.

Satyam Computer Services Limited ended down by 3.18%. The company was honored, along with the LV Prasad Eye Institute, with a Consumer Health World Award for a tele-ophthalmology program, which provides expert and affordable eye care to Indian villages.

Aurobindo Pharma Limited remained unchanged. The company has received tentative approval for Lopinavir/Ritonavir Tablets 100/25mg and 200/50mg from the US Food & Drug Administration (USFDA).