Post Session Commentary - May 8 2009

Profit booking dragged down the market to end in red terrain after reporting gain in previous session. Indian market dropped sharply lower and tanked around 2% as intense selling pressure was witnessed in key indices. Rise in inflation to 0.70% for the week ended 25th April 25009, as against 0.57% the week before also depreciated the sentiments. Volatility gripped the market during the trading as polling is going on for India''s 15th Lok Sabha.

The market opened on flat note tracking mixed cues from the global markets and soon turned volatile. The US stock markets on Thursday closed lower on the back of a weak government bond auction. After the market hours, the US bank stress tests results released that said that 10 of the 19 financial firms tested would need to raise a total of $75 billion in additional capital. Further, Indian benchmark indices slipped into red after inflation data and continued to extend their losses. Favorable cues from the European markets and positive US index futures were unable to bring any respite. Global markets observed firmness after the results of US banks’ stress tests did not disclosed negative effects. Finally, market closed with losses with BSE Sensex ended below 11,900 level and NSE Nifty closed lower than 3,650 mark. From sectoral indices, investors off-loaded positions across the sectors barring Consumer Durable index. Besides, Bank Metal, IT, Teck, Power, Realty, and Pharma stocks contributed to most of the selling pressure.

Among the Sensex pack 26 stocks ended in red territory and 4 in green. The market breadth indicating the overall health of the market remained flat as 1266 stocks closed in green while 1266 stocks closed in red and 91 stocks remained unchanged in BSE.

The BSE Sensex closed lower by 240.51 points at 11,876.43 and NSE Nifty ended down by 63.20 points at 3,620.70. BSE Mid Caps closed with loss of 6.52 points at 3,770.42 while Small Caps closed with gain of 13.66 at 4,277.26. The BSE Sensex touched intraday high of 12,180.07 and intraday low of 11,765.06.

Losers from the BSE Sensex pack are Wipro Ltd (6.59%), ICICI Bank (5.19%), Maruti Reliance Infra (5.07%), Sterlite Industries (4.93%), M&M Ltd (4.28%), HDFC (4.19%), RCom (61.85%), RCom (4.11%), Tata Steel (4.03%), ACC Ltd (3.55%) and BHEL (3.44%).

Gainers from the BSE Sensex pack are JP Associates (2.53%), HUL (0.98%), L&T Ltd (0.42%) and Grasim Indus (0.03%).

The annual rate of inflation grew marginally to 0.7% for the week ended April 25 as against 0.57% the week before. The indices for manufactured products and primary articles increased 0.3% and 0.2% respectively. However, the index for fuel, power, light and lubricants remained unchanged at its previous week''s level of 323 (provisional).

On the global markets front the Asian markets which opened before the Indian market, ended modestly higher ahead of US employment data which is due to be released later tonight. US job report could strengthen or weaken a growing belief that recession in the world''s largest economy is starting to ease. Shanghai Composite, Hang Seng, Nikkei 225 and Seoul Composite ended up by 28.2, 171.98, 47.13 and 11.05 points at 2,625.65, 17,389.87, 9,432.83 and 1,412.13 respectively. However, Straits Times index dropped marginally by 3.39 points at 2,238.21.

European markets which opened after the Indian market are trading in green. In Frankfurt the DAX index is trading up by 121.44 points at 4,925.54 and in London FTSE 100 index is trading higher by 64.55 points at. 4,463.23. The European Central Bank slashed its main interest rate and announced a three-pronged drive of unconventional steps to drive down borrowing costs. The ECB lowered the ref rate by a quarter percentage point to a new record low of 1.0%.

The BSE Bank index decreased by (3.21%) or 198.99 points to close at 6,007.47. Major losers are Axis Bank (3.45%), Yes Bank (3.40%), Canara Bank (3.36%), IDBI Bank (3.35%) and ICICI Bank (3.22%).

The BSE Metal index closed down by (2.52%) or 205.21 points at 7,949.87 on profit booking. Main losers are Sterlite Industries (6.72%), Hindalco (6.05%), JSW Steel (5.21%), Hindustan Zinc (4.37%) and Jindal Steel (3.64%).

The BSE IT index lost (2.15%) or 59.90 points at 2,725.35 the US government plans to scrap tax incentives that encourage American firms to ship jobs overseas. Scrips that lost are Wipro Ltd (4.34%), Infosys Tech (2.08%), NIIT Ltd (2.02%), HCL Tech (1.34%) and Aptech Ltd (1.33%).

The BSE Teck stocks also declined by (1.93%) or 43.83 points to close at 2,226.61. Major losers are Wipro Ltd (4.34%), Zee Ent (23.97%), Balaji Tele (2.94%), Jagaran Prak (2.76%) and Adlabs Films (2.66%).

The BSE Power index lost (1.72%) or 38.15 points to close at 2,176.34. Losers are Suzlon energy (3.88%), Reliance Infra (3.41%), GVK Power (3.35%), BHEL (2.29%) and Siemens Ltd (1.91%).

The BSE Realty ended down by (1.13%) or 26.90 points at 2,355.61. Losers are Penland Ltd (5.28%), Unitech Ltd (2.78%), Anant Raj (2.73%), Akruti City (1.60%) and Pheonix Mill (1.10%).

Tata Steel dropped by 4.03%. The company said its sales volume increased by 31 per cent to 4.52 lakh tonnes in April as against 3.43 lakh tones in the corresponding period last year and this growth was due to robust demand from auto as well as construction sectors

Bank of Baroda decreased by 2.41%. The bank has slashed its deposits rates by 0.25 per cent for all maturities above 181 days. The revised rates will come into effect from 11th May, 2009.

DLF dropped by 0.88%. The company may have to pay additional tax of Rs 300-400 crore to the government for the financial year 2005-06, after the Income-Tax (I-T) department in a special investigation found that the company showed a lower income of Rs 1,200 crore for the given year.

Union Bank of India lost 0.28%. The bank in joint venture with KBC Group, Belgium-based company is looking at the option to foray into mutual funds business by December this year and hopes to receive Sebi''s approval to set up the firm by June 30.

Andhra Bank dropped by 1.62%. The bank has posted 61.94% increase in its standalone net profit to Rs 2,012.105 million for the quarter ended March 31, 2009 as compared to Rs 1,242.507 million for the quarter ended March 31, 2008.

UCO Bank advanced by 4.83%. The Bank has reported 19.27% rise in its net profit to Rs 1,025.60 million for the quarter ended March 31, 2009 as compared to Rs 859.90 million for the quarter ended March 31, 2008.

Oil and Natural Gas Corporation (ONGC) gained 0.72%. The corporation is looking at the option to exit Cairn India''s Rajasthan oilfields due to unviability of the project due to the Government levies that it will have to bear.

Sun Pharmaceutical Industries closed up by 0.54%. The company announced that USFDA has granted its subsidiary a tentative approval for Abbreviated New Drug Application (ANDA) for generic Uroxatral Extended Release tablets.