Post Session Commentary - May 14 2009

Indian market closed on negative note despite trimming some of its losses due to recovery in European markets. Market lost momentum on warning of Fitch rating agency that the government needs to reduce fiscal budget deficit to evade having its credit rating lowered. Market exhibited volatility after an exit poll projection ruling Congress party-led coalition was marginally ahead in the race to form the new government. Meanwhile, India’s inflation dropped to 0.48% after increasing fro three successive weeks, for the week ended 2nd May 2009, from 0.70% in the previous week.

The market today opened sharply lower tracking negative cues from the markets all over the world. However, the US stock markets on Wednesday ended lower on the back of unexpected fall in advance retail sales data for April that led to the broad based selling on stocks. Further, Indian benchmark indices continued to trade lower amid volatility due to intense selling pressure. Though, market tried to recover a bit but was unable to hold momentum remained in red territory. Investors were cautious ahead of election results this weekend. BSE Sensex ended below 11,900 level and NSE Nifty closed below 3,600 level. From the sectoral front, Oil & Gas, Teck, Capital Goods, Metal and Bank stocks contributed to most of the selling pressure. However, Reality, Auto and Consumer Durables stocks remained in limelight as witnessed most of the buying from these baskets. Mid Cap and Small Cap stocks also gathered some favor during the trading session.

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 flat as 1213 stocks closed in red while 1263 stocks closed in green and 78 stocks remained unchanged in BSE.

The BSE Sensex closed down by 146.74 points at 11,872.91 and NSE Nifty ended lower by 41.80 points at 3,593.45. BSE Mid Caps and Small Caps closed with gains of 15.48 and 23.94 points at 3,756.93 and 4,244.15 respectively. The BSE Sensex touched intraday high of 11,935.86 and intraday low of 11,695.52.

Losers from the BSE Sensex pack are Sterlite Industries (5.52%), Bharti Airtel (4.13%), Tata Motors (3.04%), Wipro Ltd (2.78%), L&T Ltd (2.55%), ONGC Ltd (2.43%), ICICI Bank (2.36%), Sun Pharma (1.98%) and HDFC (1.64%).

Gainers from the BSE Sensex pack are DLF Ltd (7.18%), Ranbaxy Lab (3.66%), Reliance Infra (2.03%), HUL (1.29%), RCom (0.85%) and Maruti Suzuki (0.75%).

Inflation fell to 0.48% after increasing fro three consecutive weeks, for the week ended 2nd May 2009, from 0.70% in the previous week. Inflation eased despite rise in prices of food prices like pulses, cereals and vegetables. However, prices of fruit declined along with prices of jet fuel. This is the ninth week in a row when inflation stood below one per cent.

On the global markets front the Asian markets which opened before the Indian market, ended lower as signs of distress among American consumers reduced hopes for a faster end to the global recession. Shanghai Composite, Hang Seng, Nikkei 225, Straits Times index and Seoul Composite ended lower by 23.88, 517.93, 246.76, 63.18 and 33.57 points at 2,639.89, 16,541.69, 9,093.73, 2,122.11 and 1,380.95 respectively.

European markets which opened after the Indian market are trading mixed. In Frankfurt the DAX index is trading down by 29.35 points at 4,698.26 while in London FTSE 100 is trading higher by 0.08 points at 4,331.45.

The BSE Oil & Gas stocks dropped by (1.54%) or 131.69 points to close at 8,408.12. Major losers are Essar Oil Ltd (5.95%), Cairn Ind (5.04%), ONGC Ltd (2.43%), Reliance (1.51%) and Reliance Pet (1.04%).

The BSE Teck index ended lower by (1.32%) or 30.08 points to close at 2,248.11. Tata Communication (5.79%), Balaji Tele (5.36%), Bharti Airtel (4.13%), IBN18 (3.28%) and Wipro Ltd (2.78%) ended in negative territory.

The BSE Capital Goods index lost (1.14%) or 96.45 points to close at 8,377.37 on profit booking. Main losers are Jyoti Struct (3.42%), Havells India (2.97%), L&T Ltd (2.55%), Walchand In (2.13%) and Suzlon Energy (1.56%).

The BSE Metal index closed with decrease of (0.98%) or 76.33 points at 7,736.66 as commodity prices slipped on the London Metal Exchange. Scrips that lost are Sterlite Industries (5.52%), Hndustan Zinc (5.36%), Gujarat NRE C (2.40%), Ispat Industries (1.77%) and JSW Steel (1.38%).

The BSE Reality outperformed the benchmark indices as ended up by (2.58%) or 59.14 points at 2,354.56 on hopes that lower rates will spur housing demand. Gainers are DLF Ltd (7.18%), Mahindra Life (4.29%), Indiabull Real (2.48%), Housing Dev (1.95%) and Akruti City (0.51%).

The BSE Auto index gained (0.62%) or 22.63 points to close at 3,701.63. Gainers are Bajaj Auto (7.49%), Bharat Forge (4.22%), Amtek Auto (4.02%), MRF Ltd (3.33%) and Herohonda Motors (1.47%).

Tata Motors dropped by 3.04%. The company said that it has received in excess of 2.03 lakh bookings for the Nano and collected almost Rs 2,500 crore. The company sold a total of 6.10 lakh forms.

Ambuja Cements Ltd fell 0.07% despite the company will add 6 million tons capacity by the end of the current calendar year following rise in demand from rural markets.

Hinduja Global Solutions Ltd spurted by 19.98% after consolidated net profit jumped 67.56% to Rs 36.06 crore in Q4 March 2009 over Q3 December 2008.

DLF closed up by 7.18%. The country’s largest real estate company, is looking to raise Rs.10,000 crore in the next 2-3 years through sale of its treasury investments, land parcels and real estate projects.

Four Soft Limited gained 3.28%. The company recently completed implementation of its Warehouse Management Software - 45 eLog through its subsidiary Four Soft Netherlands B.V. at Midi Integrated Logistics B.V. (Midi), a Netherlands based freight forwarding and third party (3PL) logistics company, with an established international network, covering various geographical locations. Midi has been partnering with Four Soft for its various software requirements for more than a decade now.

SBI ended marginally up by 0.45%. The bank on Tuesday cut deposit rates across various maturities by up to 50 basis points. This is the second time in this month that SBI is cutting its deposit rates. Earlier this month, the lender had cut interest rates on all tenure deposits by 25 basis points.