Post Session Commentary - Apr 21 2009

The domestic market finally landed in negative precinct after skipping up and down throughout the trading session on mixed global cues. The benchmark indices moved southward despite RBI’s monetary policy announcement in which it cuts repo and reverse repo rates by 25 bps each to 4.75% and 3.25% respectively. However, market gained some ground during afternoon trade on a little buying seen among key stocks.

The market opened today on downbeat note mirroring unfavorable global cues. The US stock on Monday ended sharply lower with the financials closed 11.4% lower after Bank of America reported that its first quarter credit loss provisions totaled $13.4 billion, about $5 billion higher from the fourth quarter. The Indian market turned volatile shortly after opening and continued to trade lower till mid session. However, benchmark indices reported some recovery during afternoon trade, which was short-lived as stocks declined further despite RBI’s rate cut. Positive opening of European markets was also unable to bring much respite in the domestic bourses. Market slipped further to end the day with losses on selling pressure in key stocks. BSE Sensex ended below 10,900 level and NSE Nifty below 3,400. From sectoral front, most of the selling was seen in Bank, Auto, Capital Goods, Metal and IT stocks. However, Reality, FMCG and Pharma stocks managed to gain favor from the market. The broader markets were flat today as Mid Cap stocks ended marginally lower whereas Small Cap stocks were slightly up.

Among the Sensex pack 18 stocks ended in red territory and 12 in green. The market breadth indicating the overall health of the market remained flat as 1288 stocks closed in red while 1226 stocks closed in green and 83 stocks remained unchanged in BSE.

The BSE Sensex closed lower by 81.39 points at 10,898.11 and NSE Nifty ended down by 11.80 points at 3,365.30. BSE Mid Caps closed with losses of 5.77% at 3523.14 while Small Caps closed with gains 16.83 points at 4,027.98. The BSE Sensex touched intraday high of 11,068.82 and intraday low of 10,764.08.

Losers from the BSE Sensex pack are Tata Steel (7.06%), ICICI Bank (6.51%), Hindalco Maruti Suzuki (5.38%), Tata Motors (5.18%), Sterlite Industries (4.21%), L&T Ltd (3.41%), SBI (3.13%), Reliance Infra (3.12%) and M&M Ltd (2.45%).

Gainers from the BSE Sensex pack are Bharti Airtel (5.35%), Hindalco (3.83%), Sun Pharma (3.15%), DLF Ltd (2.84%), Tata Power (2.41%), ITC Ltd (2.33%) and HDFC Bank (1.84%).

RBI cuts repo and reverse repo rates by 25 bps each. The RBI cuts repo rate to 4.75% from 5% earlier and the reverse repo rate to 3.25% from 3.5%. Moreover, RBI says the GDP projection for FY10 at 6%. Cash reserve Ratio (CRR) kept unchanged at 5%. The Bank Rate has been retained unchanged at 6.0 per cent. RBI projected FY10 inflation at 4.0% by end March and FY10 credit growth projected at 20.0% and FY10 deposit growth projected at 18.0%. The First Quarter Review of Monetary Policy for 2009-10 will be undertaken on July 28, 2009.

On the global markets front the Asian markets which opened before the Indian market, ended mostly lower with decline in financial stocks on worries about rising bad loans at banks in the region as well as in the U.S. Stocks dragged down also due to lower-than-expected profit at China Mobile. Shanghai Composite, Hang Seng and Nikkei 225 ended lower by 21.63, 465.02 and 213.42 points at 2,535.83, 15,285.89 and 8,711.33 respectively. However, Straits Times index and Seoul Composite gained 12.40 and 0.42 points at 1,887.25 and 1336.81 respectively.

European markets which opened after the Indian market are trading in green. In Frankfurt the DAX index is trading up by 32.16 points at 4,518.46 and in London FTSE 100 is trading slightly up by 1.3 points at 3,992.16.

The BSE Bank index dropped by (2.8 %) or 156.75 points at 5,316.70 despite RBI’s rate cut. Scrips that lost are ICICI Bank (6.51 %), Bank of India (5.59%), Punjab National Bank (4.19%), Bank of Baroda (4.06%) and Kotak Bank (3.31%).

The BSE Auto index lost (2.52%) or 87.14 points to close at 3,364.41 on profit booking after a recent sharp rally in past trading session. Losers are Maruti Suzuki (5.38%), Tata Motors (5.18%), Amtek Auto (2.57%), M&M Ltd (2.45%) and Hero Honda Motors (2.11%).

The BSE Capital Goods index also ended lower by (2.39%) or 190.93 points at 7,791.31. Punj Lloyd (8.62%), Siemens Ltd (4.65%), Crompton Greaves (4.35%), Kalpat Power T (3.61%) and L&T Ltd (3.41%) ended in negative territory.

The BSE Metal plunged (1.8%) or 125.41 points at 6,836.88. Losers are Tata Steel (7.06%), Sterlite Industries (4.21%), Gujarat NRE C (3.26%), JSW Steel (2.77%) and Hindustan Zinc (1.97%).

The BSE Reality index advanced by (2.27%) or 49.96 points to close at 2,249.31 as reversed losses on expectations that lower rates will spur housing demand. Main gainers are Anat Raj (9.97%), Orbit Co (8.47%), Indiabull Real (5.44%), Housing Dev (5.17%) and DLF Ltd (2.84%).

The BSE FMCG stocks gained (1.57%) or 32.47 points to close at 2,140.3. Major gainers are Dabur India (5.31%), ITC Ltd (2.33%), HUL (1.72%) and Colgate Palm (0.61%).

Hexaware Technologies advanced by 2.41%. The company announced a global partnership with Greenplum, a leading provider of database software for the next generation of data warehousing and large scale analytic processing. While Greenplum will provide the database platform, Hexaware will enable the migration, implementation, upgrades and maintenance services on these platforms.

Matrix Laboratories Limited (Matrix) gained 0.42%. The company has been selected by the Clinton HIV/AIDS Initiative (CHAI) under its UNITAID-funded projects as the primary supplier of five antiretroviral (ARV) drugs used in second-line HIV/AIDS treatment regimens. Matrix also has been selected as the primary supplier of seven ARVs used for pediatric treatment.

TCS ended lower by 1.55%. The company reported slower growth in net profit and revenues in the March quarter. The company’s net profit grew 4.6% year- on-year to Rs 1,314 crore, while revenues grew 17.7% to Rs 7,171.8 crore in the fourth quarter of FY09. However the company issued a 1:1 bonus to the shareholders.

Oriental Bank of Commerce lost 2.96%. The bank has announced the cut in its term deposit rates by 25-100 basis points across various maturities and the revised rates will be applicable from April 21.

ICICI Bank declined by 6.51% after news which says that that the Group''s private equity firm ICICI Ventures CEO and MD Renuka Ramnath has resigned. The head of its insurance arm, Shikha Sharma, also put in her papers to join Axis Bank.