Post Session Commentary - June 16 2009

The domestic stock market closed the extreme volatile session with decent gains. After a gap down opening, the domestic market made a smart turn around to recover from the fall tracking the higher advance tax payment by the corporates for period between April-June quarter. The figures suggest that the banks have outperformed some of their counterparts in other sectors. Moreover the public sector oil marketing companies have bounced back by paying the advance tax for Q1 FY10 from NIL payments in the year-ago period. Among the banks, IndusInd bank has paid 135% higher advance tax for April-June quarter as against the same period last year. In line with this, State Bank of India , has recorded an impressive 60% rise in its first quarter tax payment at Rs 1,070 crore as against Rs663 crore reported last year. ICICI Bank too, recorded a higher tax payment than last year. From Rs 340 crore last year, it has increased to Rs 366 crore this year. However, Life Insurance Corporation reported a marginal increase in tax payment to Rs475 crore as against Rs435 crore during the corresponding period last year. On the other hand, Reliance Industries has recorded a fall of 8.8% in Q1 advance tax payment as it has paid Rs3.1bn as against Rs3.4bn in the same period of the previous fiscal year. From the engineering space, L&T has posted an increase of 15% in its advance tax payment, paying Rs1.1bn as compared to Rs950mn in the year-ago period. From the sectoral front, the Bankex stocks remained in the lime light on the back of better advance tax payments numbers. In the domestic front, the investors on-loaded position across almost all the sectors led by Bankex, PSU, Power, Metal and Realty index.

After a gap down opening the domestic stock market changed its gears to bounce back from the fall on sustained buying across the counters. The market moved into the green zone from red on the back of reports of higher advance tax payments for April-June 2009 quarter that boosted the investors’ sentiments. However, the global cues are not supportive as in the global arena, the US Markets on Monday shed huge losses recording the worst single day loss in one month. The selling pressure erupted right in the first leg of the trading which was carried from the other markets that reported losses across Asia and Europe. There was lack of news and just after the G-8 weekend meeting, the sense of bearishness prevailed across Asia, Europe and also US. The surge in the US dollar against other currencies caused intense selling in commodity space.

Among the Sensex pack 24 stocks ended in positive territory while 6 closed in negative. The market breadth indicating the overall health of the market remained strong as 1,642 stocks closed in green while 1,007 stocks closed in red while 73 stocks remained unchanged in BSE.

The BSE Sensex closed higher by 82.39 points or 0.55% at 14,957.91 and NSE Nifty closed up by 33.80 points or 0.75% at 4,517.80. The BSE Mid Caps and Small Caps closed with gains of 112.96 and 125.60 points at 5,226.16 and 6,011.36. The BSE Sensex touched intraday high of 15,022.19 and intraday low of 14,621.97.

Losers from the BSE Sensex pack are Sterlite Inds (4.42%), Reliance Inds (1.78%), Bharti Airtel (1.30%), Wipro (1.18%) and Bhel (0.35%).

Gainers from the BSE Sensex pack are Reliance Infra (6.14%) followed by SBIN (4.38%), JP Associates (4.07%), Tata Steel (3.88%), Tata Power (3.66%) and Sun Pharma (3.29%).

On the global markets front the Asian markets which opened before the Indian market, closed in red. Nikkei, Hang Seng, Strait Times and Seoul Composite closed lower by 2.86%, 1.80%, 1.23% and 0.94% at 9,752.88, 18,165.50, 2,288.16 and 1,399.15 respectively..

European markets which opened after the Indian market are trading in positive. In Frankfurt the DAX index is trading up by 0.20% at 4,899.73 and in London FTSE 100 is trading higher by 0.45% at 4,35.58.

The BSE Bankex index surged (2.26%) or 181.36 points to close at 8,202.49. Main gainers are Indus Ind Bank (17.17%), IDBI Bank (10.15%), Canara Bank (5.74%), Yes Bank (5.10%) and AXIS Bank (5.79%).

The BSE Power index advanced (1.92%) or 56.24 points at 2,991.52. Scrips that mostly gained are Torent Power (6.56%), Tata Power (3.66%), Suzlon Energy (2.62%), GVK Power (2.57%), NTPC (1.31%) and Power Grid (0.29%).

The BSE Metal index ended higher by (1.81%) or 212.84 points at 11,961.38 as Jai Corp (4.99%), Jindal Steel (4.71%), Hindustan Zinc (4.21%), Ispat Industries (3.95%) and Tata Steel (3.88%) ended in positive territory.

The BSE Realty index grew (1.63%) or 57.89 points to close at 3,598.75. Gainers are Mahindra Life (6.97%), Orbit Co (4.98%), Ansal Infra (4.81%), Sobha Developers (4.98%), Parsavnath (3.93%) and Phoenix Mill (3.52%).

The BSE Consumer Durables increased (1.36%) or 40.17 points at 2,989.03. Gainers are Blue Star (4.31%), Videocon Industries (2.17%), Gitanjali Gems (1.32%) and Rajesh Export (1.23%).

The BSE Capital Goods index improved (1.28%) or 160.36 points to close at 12,677.57. Gainers are Reliance Industrial Infra (7.80%), Alstom Project (6.01%), Punj Lloyd (4.08%), Havells India (3.75%) and Bharat Electrical (3.51%).

The BSE Health Care index increased (1.05%) or 38.13 points at 3,674.58. Gainers are Bilcare (3.59%), Sun Pharma (3.29%), Ipca Lab (2.74%) and Cipla (2.49%).

Rashtriya Chemicals & Fertilizers Ltd fell 3.76% to close at Rs83.25. The company has announced the following results for the quarter & year ended March 31, 2009. The Company has posted a net profit of Rs 393.70 million for the quarter ended March 31, 2009 as compared to Rs 513.70 million for the quarter ended March 31, 2008. Total Income has increased from Rs 13610.30 million for the quarter ended March 31, 2008 to Rs 19385.70 million for the quarter ended March 31, 2009.

Flawless Diamond India Ltd grew by 1.85% to close Rs38.45. The company has informed that the Companys Export Business of Diamond and Designer Jewellery has again started picking up. Company has received 2 more Orders from following buyers. This order should be completed within 180 days. One order is Madrid Impex FZE, Dubai for Rs 52 Million INR & Malay Impex, Hong Kong for Rs 58 Million.

TRF Ltd surged 5% to close at Rs904.05. The company at its meeting held on June 16, 2009 that it has approved the issue of Bonus Shares in the ratio of 1:1 (i.e. one share for every one share held by the existing shareholders of the Company), subject to the approval of Shareholders at the forthcoming Annual General Meeting of the Company scheduled to be held on July 20, 2009.