Post Session Commentary - May 19 2009

Domestic market concluded its sea saw movement on flat note after a high volatile session. The benchmark indices were on upbeat mood during mid session on hopes that new stable government will lead to constructive reforms. In addition, firm global markets also supported the sentiments. However, market pared gains after rise in afternoon trading on profit booking following historic rise in previous session.

The market opened significantly higher tracking positive cues from the global markets. However, Indian benchmark indices immediately slipped into red on profit taking emerged due to profit taking after sharp rally in previous session. Market was highly instable and continued to move up and down barring some trails of upturn during afternoon trading. Finally, market was incapable to gather the momentum and closed flat. Monday, the US stock markets closed at session highs led by gains among the bank and financial services stocks that led the broader market to its best single-session percentage advance in nearly two weeks. From the sectoral front, most of the selling was witnessed in IT, Teck, Pharma, FMCG and Oil & Gas stocks. However, Realty, Bank, Capital Goods, Auto, Power and Metal stocks were in limelight as observed most of the buying from these baskets. Mid Cap and Small Cap stocks were also able to gain market favour during the trading session.

Among the Sensex pack 18 stocks ended in green territory and 12 in red. The market breadth indicating the overall health of the market remained positive as 1927 stocks closed in green while 739 stocks closed in red and 48 stocks remained unchanged in BSE.

The BSE Sensex ended marginally up by 17.82 points at 14,302.03 whereas NSE Nifty closed slightly lower by 4.70 points at 4,318.45. BSE Mid Caps and Small Caps ended with gains of 153.34 and 117.40 points at 4,407.82 and 4,784.14 respectively. The BSE Sensex touched intraday high of 14,302.03 and intraday low of 13,834.13.

Gainers from the BSE Sensex pack are DLF Ltd (19.36%), SBI (11.19%), RCom (10.54%), Grasim Industries (9.50%), M&M Ltd (9.03%), L&T Ltd (8.82%), Maruti Suzuki (7.76%), ICICI Bank (7.35%), ACC Ltd (6.61%), Reliance Infra (5.81%), ONGC Ltd (5.34%) and BHEL (4.24%).

Losers from the BSE Sensex pack are Infosys Tech (11.65%), Wipro Ltd (9.13%), TCS Ltd (8.15%), Ranbaxy Lab (6.40%), ITC Ltd (5.63%), Reliance (5.25%), Hindalco (4.14%), HUL (3.94%), JP Associates (3.49%) and NTPC Ltd (2.81%).

On the global markets front the Asian markets which opened before the Indian market, ended in higher on favorable cues from the US housing market that contributed to the overnight rally in the Wall Street. According to a reading, in US home builder sentiment increased for the second successive month and at the highest level since September 2008. In addition, banking stocks rallied in Hong Kong after China allowed yuan-denominated bonds to be issued there for the first time. Shanghai Composite, Hang Seng, Nikkei 225, Straits Times index and Seoul Composite ended higher by 23.90, 521.12, 251.60, 83.38 and 41.53 points at 2,676.68, 17,544.03, 9,290.29, 2,260.36 and 1,428.21 respectively.

European markets which opened after the Indian market are trading in green mainly due to rise in banking stocks. In Frankfurt the DAX index is trading up by 105.18 points at 4,957.14 and in London FTSE 100 is trading higher by 46.84 points at 4,493.29.

The BSE Realty index outperformed the benchmark indices as ended higher by (12.80%) or 380.01 points to close at 3,348.76 on hopes that lower rates will spur housing demand. Gainers are Housing Development (24.34%), DLF Ltd (19.36%), Sobha Dev (18.42%), Ansal Infra (17.50%) and Orbit Co (14.05%).

The BSE Bank index gained (6.84%) or 519.72 points at 8,118.36 on expectations that falling interest rates will boost lending growth. Scrips that gained are Yes Bank (16.04%), IDBI Bank (13.17%), Oriental Bank (12.81%), Indus Ind Bank (12.72%) and Kotak Bank (11.74%).

The BSE Capital Goods stocks increased by (6.33%) or 669.39 points to close at 11,245.89. Major gainers are Bharat Bijli (19.41%), Gammon Ind (17.13%), Jyoti Struct (11.44%), Elecon Eng C (10.99%), BEML Ltd (10.34%) and Crompton Greaves (10.34%).

The BSE IT index ended lower by (10.10%) or 320.35 points at 2,854.47. Patni Computers (17.52%), Mphasis Ltd (13.25%), Infosys Tech (11.65%), Wipro Ltd (9.13%) and TCS Ltd (8.15%) ended in negative territory.

The BSE Teck index dropped by (5.12%) or 135.27 points to close at 2,506.11. Main losers are Patni Computers (17.52%), Mphasis Ltd (13.25%), Infosys Tech (11.65%), Wipro Ltd (9.13%), TCS Ltd (8.15%) and Tech Mahindra (7.99%).

The BSE Pharma index ended down by (4.34%) or 148.37 points at 3,267.48. Losers are IPCA Lab (11.76%), Glaxosmith (10.50%), Ranbaxy Lab (6.40%), Wockhardt Ltd (6.15%) and Matrix Lab (6.12%).

Larsen & Toubro (L&T) ended up by 8.82%. The company and US-based GE Hitachi Nuclear Energy (GEH) signed a Memorandum of Understanding for co-operation on BWR and ABWR nuclear power plants. The recent agreement between India and USA regarding co-operation in the field of civilian nuclear power opened up new opportunities for both countries.

Amtek Auto Limited gained 10.55%. The company and Sumitomo Metal Industries of Japan have signed a Joint Venture agreement for Production and sale of forged crankshafts for automotive applications in India. This Joint Venture is to be formed with investment of 50% by Amtek, 40% by Sumitomo Metals, and 10% by Sumitomo Corporation. Sumitomo Corporation is the global partner of crankshaft business of Sumitomo Metals.

The State Bank of India (SBI) advanced by 11.19%. The largest public sector lender targets a total business of Rs 10,500 crore during the current fiscal. The deposits are targeted to be Rs 7,800 crore and the advances Rs 2,700 crore.

Tata Motors Ltd increased by 0.88%. The company said it is planning to give performance linked wage hikes to its staff for the fiscal 2009-10, but the increment would not be to the extent given last year.

Wipro Technologies lost 9.13%. The company is looking at recruiting around 1,200 employees for its BPO centre in Hyderabad over the next six months. At present, there are over 3,000 employees in the Hyderabad office.