Post Session Commentary - March 26 2009

All round buying over the ground lifted the market to report strong gain of more than 3% today as compared to previous close. The BSE Sensex extended its gains for the 4th successive day and breached 10,000 level and NSE Nifty crossed the 3,000 mark. Stocks continued to march ahead in northward direction as further ease in inflation to memorable low, raised expectations of relieve in the monetary policy by the RBI. The inflation dropped to 0.27% during the week ended March 14 2009, as against 0.44% reported last week. Besides, further buying by the foreign investors and firm US index futures also boosted the sentiments.

The Indian market extended its’ yesterday’s rally and opened sharply up tracking positive cues from markets all over the world. The US stock markets closed in green on Wednesday backed by better than expected economic data. The new home sales in US for February increased 4.7% month-over-month to an annualized rate of 337,000 versus a revised 322,000 in the previous month. Further, domestic stocks continued their upward movement as strong buying was emerged across the board. Historic ease in inflation number for the week ended 14th March also added to the positive sentiments. Finally, market touched the uppermost level during final trading but retrenched a little to end slightly below that level. From the sectoral front, mainly Capital Goods, Metal, Power, Bank, Teck, IT, Auto and FMCG stocks helped domestic bourses to gain ground. Mid Cap and Small Cap stocks also remained on buyer’s radar. However, reality stocks were not able to gain favor from the market.

Among the Sensex pack 27 stocks ended in green territory and 3 in red. The market breadth indicating the overall health of the market remained strong as 1392 stocks closed in green while 1138 stocks closed in red and 106 stocks remained unchanged in BSE.

The BSE Sensex closed higher by 335.20 points at 10,003.10 and NSE Nifty ended up by 97.90 points at 3,082.25. BSE Mid Caps and Small Caps closed with gains of 33.05 and 21.88 points at 2,874.22 and 3,187.34 respectively. The BSE Sensex touched intraday high of 10,061.36 and intraday low of 9,739.93.

Gainers from the BSE Sensex pack are Tata Motors (7.94%), L&T Ltd (6.10%), Sterlite Industries (5.97%), TCS Ltd (5.94%), BHEL (5.85%), Tata Power (5.57%), ONGC Ltd (5.36%), Maruti Suzuki (5.07%), Wipro Ltd (5.03%), Tata Steel (5.00%), Bharti Airtel (4.95%), Reliance Infra (4.91%), Hindalco (4.70%) and ITC Ltd (4.23%).

Losers from the BSE Sensex pack are Ranbaxy Lab (2.95%), DLF Ltd (0.31%) and ACC Ltd (0.62%).

The inflation eased further to 0.27% during the week ended March 14 2009, as against 0.44% reported last week. Inflation has dropped sharply as commodity prices dropped after the global economic and financial crisis deepened. The memorable fall in headline inflation has raised expectations of further easing of the monetary policy by RBI to pump in additional liquidity into the market.

On the global markets front the Asian markets which opened before the Indian market, ended higher on better than expected US economic reports. Shanghai Composite, Hang Seng, Nikkei 225, Straits Times index and Seoul Composite ended higher by 70.15, 486.87, 156.34, 67.11 and 14.78 points at 2,361.70, 14,108.98, 8,636.33, 1,758.79 and 1,243.80 respectively.

European markets which opened after the Indian market are trading mixed. In Frankfurt the DAX index is trading up by 23.51 points at 4,246.80 whereas in London FTSE 100 is trading lower by 3.93 points at 3,896.32.

The BSE Capital Goods index surged (5.42%) or 330.47 points to close at 6,425.38. Main gainers are Havells India (14.80%), Crompton Greaves (14.10%), Kalpat Power T (8.83%), L&T Ltd (6.10%) and BHEL (5.85%).

The BSE Power index also ended higher by (4.02%) or 72.76 points at 1,883.13. Crompton Greaves (14.10%), Lanco Infra (11.59%), BHEL (5.85%), GVK Power Infra (5.84%) and Tata Power (5.57%) ended in positive territory.

The BSE Metal index closed with increase of (3.97%) or 222.62 points at 5,827.32 on strong rise in metal prices in London Metal Exchange. Scrips that gained are Sesa Goa Ltd (10.46%), Ispat Industries (6.44%), Sterlite Industries (5.97%), Hindustan Zinc (5.46%) and Tata Steel 5.00%).

The BSE Bank stocks advanced by (3.38%) or 153.78 points to close at 4,706.22 as RBI issued fresh norms for the adjustment of provisions for restructured accounts, standard assets, and non-performing assets (NPAs), to support the financial health of banks. Major gainers are Indus Ind Bank (7.73%), Yes Bank (7.62%), Bank of India (7.38%), Indian Overseas Bank (6.01%) and Axis Bank (5.97%).

The BSE IT index gained (3.29%) or 75.17 points to close at 2,361.21 on hopes of a revival in the US economy that will spur domestic market. Gainers are Mphasis Ltd (6.92%), TCS Ltd (5.94%), Wipro Ltd (5.03%), Infosys Tech (3.06%) and Rolta India (2.78%).

The BSE Reality ended down (4.54%) or 75.73 points at 1,614.94. Losers are Akruti City (55.06%), Indiabull Real (3.78%), Orbit Co (3.17%), Penland Ltd (0.94%) and DLF Ltd (0.31%).

Maruti Suzuki gained 5.07%. The auto company is insistently working to launch new cars and improvising the existing ones. The auto company’s move is seen as a counter attack to Tata Motors’ newly launched Tata Nano. Maruti is expected to launch Maruti Splash or Ritz in the second week of May.

GAIL India increased by 0.45%. The company will spin off its marketing business into a separate firm from April 1. GAIL India will remain a gas transmission company and will construct cross-country pipelines to transport gas, while GAIL Gas (GGL) will carry out marketing business. However, all allied businesses such as petrochemicals and telecom will remain under GAIL India.

Tata Consultancy Services (TCS) went up by 5.94%. The company has adopted several measures to cut down costs like avoiding travel and moving people from onsite to offshore.

Indian Overseas Bank gained 0.85% as the biggest domestic institutional investors Life Insurance Corporation of India hiked its stake in the state-run bank.

Unitech Ltd zoomed 7.82% to Rs. 34.05 n report that Morgan Stanley Mauritius purchased shares in the realty firm on Wednesday, March 25, 2009.

Nucleus Software Exports surged 3.24% on bagging a new order for one of its software products.

Akruti City lost (55.06%) on the last day of F&O expiry as stocks of the company are now out of F&O. On 19th March 2009, SEBI had had excluded Akruti City from futures and options (F&O) segment through its circular.