Post Session Commentary - May 21 2009

Indian market slumped sharply lower to close near day’s low on heavy profit booking after a recent rally. Investors were cautious, though witnessed some recovery during early afternoon trade on few bouts of buying. However, the upturn was short-lived and domestic bourses once again slipped into red. Benchmark indices extended losses tracking fragile global cues. Rise in inflation to 0.61% in the 12 months to May 9, 2009 as against previous week''s annual rise of 0.48%, also weighed on sentiments.

The domestic market opened lower backed by the unfavorable cues from the markets all over the world. The Asian markets were lower and the US stock markets on Wednesday closed with losses on the back of grim economic outlook from the US Federal Reserve. Further, lack of positive news restricted benchmark indices to gather momentum. Meanwhile, during afternoon trade stocks slashed losses and gained some ground on some bouts of buying. However, market was unable to carry same impetus and slipped again into red. Market lost more ground during final trading to end the day with losses after huge selling pressure emerged across the board. BSE Sensex ended below 13,800 level and NSE Nifty closed below 4,250 level. From the sectoral front, investors off-loaded position across the sectors. Most of the selling was seen in Capital Goods, Bank, Auto, IT, FMCG and Metal stocks. However, PSU, Oil & Gas and Consumer Durable stocks remained in limelight as witnessed most of the buying from these baskets.

Among the Sensex pack 24 stocks ended in red territory and 6 in green. The market breadth indicating the overall health of the market remained positive as 2097 stocks closed in green while 627 stocks closed in red and 43 stocks remained unchanged in BSE.

The BSE Sensex closed lower by 324.12 points at 13,736.54 and NSE Nifty ended down by 59.40 points at 4,210.90. BSE Mid Caps and Small Caps closed with gains of 0.10 and 134.35 points at 4,673.87 and 5,342.53 respectively. The BSE Sensex touched intraday high of 14,089.51 and intraday low of 13,704.43.

Losers from the BSE Sensex pack are L&T Ltd (8.59%), Maruti Suzuki (6.93%), ICICI Bank (5.15%), HDFC (5.01%), Hindalco (5%), Wipro Ltd (4.86%), TCS Ltd (4.25%), M&M Ltd (3.75%), BHEL (3.73%) and SBI (3.70%).

Gainers from the BSE Sensex pack are ONGC Ltd (8.41%), RCom (4.52%), Ranbaxy Lab (2.66%), NTPC Ltd (1.87%) and Reliance Infra (1.36%).

India''s inflation hovers near the three decade low as its wholesale price index shot up 0.61% in the 12 months to May 9, 2009 as against previous week''s annual rise of 0.48%, government data showed on Thursday. The annual inflation rate was 8.57% during the corresponding week of the previous year.

On the global markets front the Asian markets which opened before the Indian market, ended in red after the U.S. central bank predicted yet deeper recession in America''s economy. Shanghai Composite, Hang Seng, Nikkei 225, Straits Times and Seoul Composite index ended higher by 40.79, 276.35, 80.49, 58.27 and 14.05 points at 2,610.62, 17,199.49, 9,264.15, 2,210.97 and 1,421.65 respectively. However Seoul Composite lost 4.47 points at 1,393.45.

European markets which opened after the Indian market are trading lower. In Frankfurt the DAX index is trading down by 69.23 points at 4,969.71 and in London FTSE 100 is trading lower by 89.66 points at 4,378.75.

The BSE Capital Goods index plunged (5.41%) or 616.94 points to close at 10,794.96. Main losers are Jyoti Struct (8.27%), ABB Ltd (6.71%), Bharat Bijli (6.13%), Areva (5.11%) and Praj Indus (4.84%).

The BSE Bank stocks dropped by (2.91%) or 230.30 points to close at 7,689.23 on fears of rising defaults in a slowing economy. Major losers are Indian Overseas Bank (7.58%), Yes Bank (6.97%), Oriental Bank (6.80%), Kotak Bank (6.64%) and ICICI Bank (5.15%).

The BSE Auto ended down by (2.07%) or 93.49 points at 4,423.14. Losers are Maruti Suzuki (6.93%), Ashok Leyland (3.82%), Herohonda Motors (2.43%), Bharat Forge (1.81%) and Tata Motors (1.77%).

The BSE IT index ended lower by (1.88%) or 53.64 points to close at 2,800.32. Wipro Ltd (4.86%), TCS Ltd (4.25%), Patni Computer (3.05%), Moser Bayer (2.40%) and Oracle Fin (2.16%) ended in negative territory.

The BSE FMCG index closed with decrease of (1.86%) or 39.34 points at 2,072.76. Scrips that lost are United Brew (5.92%), United Spr (4.06%), ITC Ltd (2.54%), Marico Ltd (2.27%) and Dabur India (1.67%).

The BSE PSU index gained (2.75%) or 204.45 points to close at 7,631.35. Gainers are MMTC Ltd (15.08%), HPCL (14.64%), IOC (14.52%), Chennai Petr (13.01%) and BPCL (10.22%).

Aurobindo Pharma surged 5.61%. The company announced that it has further expanded its partnership with Pfizer Inc., a global leader in Pharmaceuticals by executing licensing and supply agreements for several Solid Dosage and Sterile products for a number of emerging market countries.

Tata Motor dropped by 10.77%. The company raised Rs. 4200 crores ($ 840 million) through issue of Secured Non-Convertible Rupee Debentures. The issue opened for bids today at 10 am and dosed at 5 pm. The funds raised will be used for part repayment of the $3 billion bridge facility taken for acquiring Jaguar Land Rover. Tata Motors had earlier prepaid $1.11 billion.

Patel Engineering Ltd lost 1.74%. The company has bagged new orders aggregating to Rs 708.04 crore. The company has bagged an Rs 554.67 crore order from Vidarbha Irrigation Development Corporation (VIDC) and Rs 153.37 crore hydropower order from the Hknachal Pradesh Power Corporation.

Reliance Power ended lower by 3.70%. The company has bagged four hydroelectric power projects of 2,520- Mw capacity worth over Rs 18,000 crore from the Arunachal Pradesh government.

HCL Technologies plunged 1.98%. The company has received an outsourcing services contract from MTV Networks (MTVN) in the US, for online media platform development. The contract covers various brands of MTV Networks, including MTV, VH1, Comedy Central and Nickelodeon.

Reliance Industries lost 1.59%. The company has received the government approval to sign agreements with firms supplying gas to households and car owners in major cities. RIL bagged the government''s nod for the allocation of gas from RIL''s Krishna-Godavari basin to gas distribution firms (CGD) in Delhi as well as Mumbai, Ahmedabad, Gandhinagar, Agra, Indore and Ujjain.