Post Session Commentary - March 2 2009

Indian market extended its previous week’s losses to close with huge gap down on account of selling pressure witnessed across the board. Concerns of deteriorating economic conditions led stocks to extend fall by more than 3%. Weak cues from Asian stocks along with lower European markets also fueled the negative sentiments. In domestic arena, approval of RPL’s merger with RIL by with the swap ratio of 16:1, by the board of directors of RIL and RPL, failed to bring any relief. In the mean time, significant selling by FIIs also dragged the market lower.

The domestic market tumbled since initial bell mirroring weak cues from the markets all over the world. The US markets on Friday ended down with the S&P slides to a 12-year low backed by the fourth quarter GDP readings that showed the US economy shrunk at the sharpest pace since 1982. Further, benchmark indices continued to lose ground as extensive selling pressure dragged the stocks sharply lower. Meanwhile, India’s merchandise exports fell 16% in January over the same period a year earlier. Finally, market concluded its southward journey on extremely red territory. BSE Sensex ended around 8,600 mark and NSE Nifty closed below 2,700 level. From the sectoral front, most of the indices ended in red and among those, Bank, Metal, Oil & Gas, Capital Goods, Power and PSU stocks contributed to most of the downward trend. BSE Mid Cap and Small Cap stocks also witnessed huge selling pressure. However, Consumer Durable stocks were able to gain market favour during the trading session.

Among the Sensex pack 29 stocks ended in red territory and 1 in green. The market breadth indicating the overall health of the market remained negative as 1636 stocks closed in red while 731 stocks closed in green and 88 stocks remained unchanged in BSE.

The BSE Sensex closed lower by 284.53 points at 8,607.08 and NSE Nifty ended down by 89.05 points at 2,674.60. BSE Mid Caps and BSE Small Caps ended with losses of 57.31 points and 56.73 points at 2,700.98 and 3,049.28 respectively. The BSE Sensex touched intraday high of 8,762.88 and intraday low of 8,563.52.

Losers from the BSE Sensex pack are Reliance Infra (9.12%), Tata Steel (7.54%), ICICI Bank (7.28%), RCom (6.50%), JP Associates (5%), HDFC Bank (4.43%), L&T Ltd (4.40%), TCS Ltd (4.39%) and ONGC Ltd (3.92%).

Only gainer from the BSE Sensex pack is M&M Ltd (2.58%).

India’s merchandise exports fell 16% in January over the same period a year earlier, marking the fourth straight month of decline in merchandise exports, as recession in the US and EU markets continued to depress demand for its products. The exports in January were down 16% at $12.38bn while imports declined by 18% to $18.46bn. This has led to the trade gap of $6.08bn as against $7.85bn in the year-ago period.

The much-waited Lok Sabha elections schedule is announced today by the election commissioner. The General Elections are to be held between April 16 to June 1, 2009. The first phase will be held on April 16, 2009 and will cover 124 constituencies. Along with this, the phase two will be on April 23, 2009 and will cover 141 seats. The Phase three will be on April 30, 2009 and will cover 107 seats. The phase four and five will be held on May 7 and May 13, 2009 and will cover 85 and 86 seats respectively. The counting of votes will be on May 16, 2009.

On the global markets front the Asian markets which opened before the Indian market, ended in deep red. Sentiments remained weak on declines in Japanese wages and South Korean exports. Monthly wages in Japan fell 1.3% in January 2009 from a year earlier, after declining 0.8% in December 2008, the Labor Ministry said in Tokyo. South Korea''s overseas shipments decreased 17.1% in February 2009 from a year earlier following previous month''s record 33.8% fall, the government reported. Hang Seng, Nikkei 225, Straits Times index and Seoul Composite ended lower by 494.11, 288.27, 61.47 and 44.22 points at 12,317.46, 7,280.15, 1,533.40 and 1,018.81 respectively.

European markets which opened after the Indian market are trading lower. In London FTSE 100 is trading lower by 134.18 points at 3,695.91 and in Frankfurt the DAX index is trading down by 101.42 points at 3,742.32.

The BSE Bank index lost (4.86%) or 206.11 points at 4,033.99 on fears of rising defaults in a weakening economy. Main lossers are ICICI Bank (7.28%), Axis Bank (7.16%), Oriental Bank (6.08%), IDBI Bank (5.38%) and Canara Bank (5.17%).

The BSE Metal index ended down by (4.31%) or 202.15 points at 4,488.82 due to drop in global base metal prices on the London Metal Exchange. Losers are JSW Steel (8.69%), Welspan Gujarat SR (8.31%), Tata Steel (7.54%), Sesa Goa Ltd (5.88%) and Steel Authority (5.79%).

The BSE Oil & Gas index closed with decrease of (2.94%) or 178.14 points at 5,885.97 as crude oil for April delivery reversed its three day rally and prices fell by $0.46 to settle at $44.76 a barrel on the New York Mercantile Exchange. Scrips that lost are Aban Offshore (6.98%), Essar Oil Ltd (6.24%), Reliance Nat Res (4.37%), Cairn Ind (3.92%) and ONGC Ltd (3.92%).

The BSE Capital Goods index also tumbled (2.9%) or 171.06 points to close at 5,726.86. Punj Lloyd (9.04%), Reliance Industrial Infra (6.13%), Gammon Indi (5.54%), Suzlon Energy (5.06%) and Everest Kanto (4.58%) ended in red.

The BSE Power index ended lower by (2.83%) or 49.63 points to close at 1,702.12. Reliance Infra (9.12%), Suzlon Energy (5.06%), Power Grid (4.87%), GVK Power (4.74%) and GMR Infra (3.44%) ended in negative territory.

The BSE Consumer Durables stocks gained (0.15%) or 2.3 points to close at 1,544.97. Only gainer is Titan Ind (2.15%).

Reliance Industries fell 3.15% after the company set the swap ratio of 16:1 for merger of Reliance Petroleum slightly in favour of Reliance Petroleum.

Aurobindo Pharma dropped by 1.80% despite the company through its wholly owned subsidiary Aurobindo Pharma Australia Pty Ltd received it''s first approval from Therapeutic Goods Administration (TGA), Government of Australia for the registration of Auro-Lisinopril 5, Auro-Lisinopril 10 and Auro-Lisinopril 20 tablets containing Lisinopril (as dihydrate) 5mg, 10mg and 20mg.

Maruti Suzuki ended down by 0.30%. The company achieved its highest ever domestic and total sales in February 2009. The company also registered the highest ever export sales. The company in February 2009 sold 70,625 units in the domestic market up 19.1% over the corresponding period last year. The company in all sold 79,190 vehicles in February 2009; up 24.1% over the corresponding period last fiscal.