Post Session Commentary - June 17 2009

The domestic stock market closed on a deep red note on heavy selling pressures across the sectoral indices backed by the weak cues from the global markets. Though the market opened with a negative gap and managed to recover from the fall on the back of surge in the Chinese stocks. But the weak opening of the European markets do the damage that led the market to lost further grounds. However, the Chinese shares rose after the President Hu Jintao said that Beijing stimulus is showing results and China was determined to take the lead in emerging from the global economic crisis. From the sectoral front, the Realty, Metal Oil and Gas stocks were badly hit on heavy selling pressures across the counters.

The key benchmark indices extends its losses further in the final hours of the session after a gap down opening. Lack of favoring cues from the global as well as domestic arena, the domestic stock markets remained on the sellers radar through out the trading session. In the global arena, the US Markets closed with losses despite encouraging housing data. The trading started with a positive movement across the broader level however the below expected PPI data along with lack of buying sentiments pulled the markets towards the southward. Housing starts for May increased 17.2% month-over-month to an annualized rate of 532,000 and building permits inclined by 4.0% to an annualized rate of 518,000. Both numbers were encouraging and better than expected.

On the other hand, the British unemployment rate in the three months ending in April 2009 shot up to 7.2%, up from 6.5% in the three months to January, the Office for National Statistics reported Wednesday. In the three months ended April, the number of unemployed totaled stood at 2.26 millions, a rise of 232,000 from the previous three-month period and a rise of 605,000 from the same period a year earlier. Moreover, the seasonally-adjusted number of persons claiming jobless benefits grew 39,300 in May.

Among the Sensex pack 29 stocks ended in negative territory while 1 closed in negative. The market breadth indicating the overall health of the market remained weak as 1,990 stocks closed in red while 686 stocks closed in red while 75 stocks remained unchanged in BSE.

The BSE Sensex closed lower by 435.07 points or 2.91% at 14,522.84 and NSE Nifty fell by 161.65 points or 3.58% at 4,356.15. The BSE Mid Caps and Small Caps closed with losses of 205.09 and 224.82 points at 5,021.07 and 5,786.54. The BSE Sensex touched intraday high of 14,996.39 and intraday low of 14,447.02.

Losers from the BSE Sensex pack are Tata Steel (7.52%), Tata Motors (7.36%), JP Associates (6.28%), Reliance Communication (5.92%), DLF (5.66%), ONGC (5.36%) and Hindalco Inds (5.25%).

Gainer from the BSE Sensex pack is Tata Power (0.03%).

On the global markets front the Asian markets which opened before the Indian market, closed mixed. Strait Times, Seoul Composite, Hang Seng and Taiwan Weighted closed lower by 0.73%, 0.57%, 0.45% and 0.40% at 2,271.45, 1,391.17, 18,084.60 and 6,195.91 respectively. While Japan’s Nikkei closed up by 0.90% at 9,840.85. The Bank of Japan (BoJ) on Wednesday said that Japan’s economy in the coming months is "likely to show clearer evidence of leveling out over time," according to the central bank''s June report of Recent Economic and Financial Developments. Moreover, the bank also reiterated the comments made following the monetary policy meeting Tuesday that the nation''s economic conditions have “begun to stop worsening”.

European markets which opened after the Indian market are trading in negative. In Frankfurt the DAX index is trading lower by 1.08% at 4,838.05 and in London FTSE 100 is trading down by 1.01% at 4,284.66.

The BSE Realty index dropped (5.90%) or 212.25 points to close at 3,386.50. Main losers are Phoenix Mill (8.30%), India Bull Real (7.44%), HDIL (6.65%), Mahindra Life (6.33%), DLF (5.66%) and Unitech (5.57%).

The BSE Metal index plunged (5.63%) or 672.88 points at 11,288.50. Scrips that mostly lost are Tata Steel (7.52%), Ispat Industries (7.40%), JSW Steel (7.36%), Welspun Gujarat Stahl (6.86%), Sesa Goa (6.58%) and Hindalco Industries (5.25%).

The BSE Oil and Gas index ended lower by (4.26%) or 423 points at 9,514.37 as Aban Offshore (6.37%), RNRL (5.37%), ONGC (5.36%), HPCL (5.12%) and RPL (4.42%) ended in positive territory.

The BSE Capital Goods index fell (3.95%) or 500.92 points to close at 12,176.65. Losers are Reliance Industrial Infra (9.08%), Everest Kanto (6.94%), Lakshmi Machine Works (6.59%), Alstom Project (5.37%), Punj Lloyd (5.49%) and Praj Industries (5.48%).

The BSE Power decreased (3.32%) or 99.30 points at 2,892.22. Losers are Suzlon Energy (6.18%), Reliance Power (5.59%), Torent Power (4.94%), NTPC (4.68%) and GVK Power (4.13%).

The BSE Consumer Durables index declined (3.24%) or 96.72 points to close at 2,892.31. Losers are Videocon Industries (6.65%), Gitanjali Gems (6.06%), Rajesh Export (4.66%), Blue Stat Ltd. (2.35%) and Titan Industries (0.91%).

The BSE Auto index decreased (2.49%) or 120.38 points at 4,718.81. Losers are Tata Motors (7.36%), Exide Industries (4.43%), Bharat Forge (3.67%) and Mahindra & Mahindra (3.27%).

Sobha Developers Ltd inched up 0.59% to close at Rs222.55. The company has accorded to the following at the Extra Ordinary General Meeting (EGM) of the Company held on June 17, 2009- 1. Infusion of additional capital up to Rs 1500 Crores by further issue of securities pursuant to Section 81 (1A) of the Companies Act, 1956. 2- Increasing the limit of Foreign Institutional Investors investment in the equity shares of the company up to 100% of the equity Share capital of the Company

Kavveri Telecom Products Ltd dipped 4.99% to close at Rs60.90. The company has informed that the Board of Directors of the Company at its meeting held on June 17, 2009, has approved the issue of Equity Shares of the Company on rights basis.

Syndicate Bank tumbled 5.60% to Rs72.45. The bank has informed that the Bank has on June 15, 2009 raised Tier II Capital to the extent of Rs 200.00 Crore through issue of Unsecured Non-Convertible Sub-ordinated Debt (eligible for Lower Tier II Capital). The issue opened and closed on June 15, 2009. The bond was priced at 8.49%p.a. payable annually.