Post Session Commentary - May 13 2009

The Indian market closed the volatile session on negative note due to the profit booking after strong rally in previous session. Benchmark indices plunged on the back of huge selling witnessed during the trading. Investors were cautious on political uncertainty as polling for 15th Lok Sabha to conclude today, but there is no clear picture of who would form the next government. Mixed US Index futures also contributed to the uncertainty.

The market opened above the previous close while turned volatile and slipped into negative soon after start. The US stock markets closed in mixed on Tuesday as investors bought healthcare and energy stocks. The domestic bourses turned volatile tracking mixed cues from the markets all over the world. Besides concerns for result of Lok Sabha election this weekend also fueled to the uncertainty. However, market tried to recover during final trading but was unable to sustain the momentum and slipped again to end the day with losses. Market ignored some positive sentiments from Asian stocks and continued to trade weak till end. BSE Sensex fell below 12,050 level and NSE Nifty below 3,650. From sectoral front, all indices ended in red barring Consumer Durables stocks. Besides, Metal, IT, FMCG, PSU, Oil & Gas and Bank stocks contributed to most of the selling pressure. Mid Cap and Small Cap stocks also remained out of favour.

Among the Sensex pack 22 stocks ended in red territory and 8 in green. The market breadth indicating the overall health of the market remained negative as 1336 stocks closed in red while 1154 stocks closed in green and 91 stocks remained unchanged in BSE.

The BSE Sensex closed lower by 138.38 points at 12,019.65 and NSE Nifty ended down by 45.85 points at 3,635.25. BSE Mid Caps and Small Caps closed with losses of 4.79 and 20.50 points at 3,741.45 and 4,220.21 respectively. The BSE Sensex touched intraday high of 12,256.43 and intraday low of 11,934.44.

Losers from the BSE Sensex pack are Tata Steel (3.67%), Sterlite Industries (3.46%), ONGC Ltd (3.44%), JP Associates (2.90%), Maruti Suzuki (2.67%), SBI (2.57%), M&M Ltd (2.40%), TCS Ltd (2.36%), RCom (2.22%), HDFC Bank (2.22%) and ITC Ltd (1.85%).

Gainers from the BSE Sensex pack are ACC Ltd (3.37%), HDFC (3.03%), Grasim Industries (1.83%), Ranbaxy Lab (1.05%), Hindalco (0.92%) and Tata Motors (0.52%).

On the global markets front the Asian markets which opened before the Indian market, ended mostly up with rise in oil companies on stronger crude prices. However, investors remained cautious as a huge spring rally showed signs of weakness. Shanghai Composite, Nikkei 225, Straits Times and Seoul Composite index ended higher by 45.59, 41.88, 7.16 and 11.01 points at 2,663.77, 9,340.49, 2,185.29 and 1,414.52 respectively. However, Hang Seng lost 94.02 points at 17,059.62.

European markets which opened after the Indian market are trading in mixed as a drop in banking shares overshadowed gains in defensive stocks. In Frankfurt the DAX index is trading higher by 5.12 points at 4,859.23 whereas in London FTSE 100 is trading down by 17.02 points at 4,408.52.

The BSE Metal index dropped by (2.07 %) or 165.53 points at 7,812.99, on profit taking. Scrips that lost are Gujarat NRE C (3.85%), Welspan Gujarat SR (3.71%), Tata Steel (3.67%), Sterltie Industries (3.46%) and Akruti City (2.95%).

The BSE IT stocks decreased by (1.56%) or 44.13 points to close at 2,792.64 on US government plans to scrap tax incentives that encourage American firms to ship jobs overseas. Major losers are NIIT Ltd (6.07%), HCL Tech (3.90%), Financ Tech (3.38%), Aptech Ltd (2.93%) and TCS Ltd (2.36%).

The BSE FMCG index lost (1.54%) or 32.27 points to close at 2,059.42. Main losers are United Brew (3.75%), Tata Tea (2.36%), Nestle Ltd (2.18%) and Colgate Palm (2.03%).

The BSE PSU index ended lower by (1.47%) or 90.03 points at 6,016.45. Losers are St Trade Corp (5.30%), Neyveli LIG (5.02%), RECL Ltd (4.31%), ONGC Ltd (3.44%) and UCO Bank (3.03%).

The BSE Oil & Gas index also ended lower by (1.39%) or 120.38 points at 8,539.81. ONGC Ltd (3.44%), Essar Oil Ltd (2.84%), Cairn Ind (1.90%), RNRL (1.88%) and Reliance (1.04%) ended in negative territory.

The BSE Bank index lost (1.14%) or 71.29 points to close at 6,179.39. Main losers are Indus Ind Bank (3.67%), Karnataka Bank (2.61%), SBI (2.57%), Bank of India (2.56%) and HDFC Bank (2.22%).

Tata Consultancy Services lost 2.36%. The company announced that it has been selected to deliver TT transformation and support services to Volkswagen Group UK Ltd in a five year contract.

ONGC ended lower by 3.44%. The company has chalked out an investment plan of Rs.6,000 crore to invest in Western and Eastern Offshore fields to raise output in this fiscal.

DLF dropped by 1.59%. Company’ss promoters sold 9.9% stake or 168 million shares via block deal to institutional investors. DLF said the funds will be used for contractual obligation to DAL (DLF Assets) and for buying out DE Shaw stake in DAL.

Tata Steel tumbled 3.67%. The company plans to prepay more than £200 million (about Rs 1,500 crore at current exchange rates) of the non-recourse debt that it took to acquire Anglo-Dutch steel major Corus in 2007.

Piramal Life Sciences Limited advanced by 4.99%. The company has received regulatory approval by Drug Controller General of India (DCGI) for the initiation of two phase-l/ll combination studies of its cancer molecule P276 for pancreatic and head and neck cancer.

Educomp Solutions Ltd gained 2.01% as the company is seeking shareholders approval to hive off two divisions.