Post Session Commentary - June 18 2009

The domestic stock market closed the extreme volatile session on a deep red note by extending its losses for the second straight day. The market dipped into the red zone after hovering in the negative and positive terrain till the mid session on the back of fears that government may rollback excise duty cuts in order to return to fiscal prudence amid slack revenue collections. This dampened the sentiments of the investors that led to heavy selling pressures across the sectoral indices. On the other hand, India’s wholesale price index dipped 1.6% for the week ended June 6, 2009 as against the rise of 0.13% for the previous week ended May 30. From the sectoral front, Realty, Metal, Power stocks were badly hit on heavy selling pressures across the counters.

Tracking the weakness in the global markets, the domestic key benchmark indices opened with a negative gap but bounced back soon on selective buying across the indices. The market kept on hovering in the positive and negative territory till the mid session and touch day’s high tracking the fall in India’s inflation to the negative terrain. However, the market completely changed its course to continue its southward journey after the afternoon trade to touch the day’s low. The market managed to comes off marginally from the day’s low in the final hour of the session. In the global arena, the US Markets closed flat. The discouraging forecast from FedEx about its downside guidance and lower ratings for 22 banks by S&P enforced broad based selling. The Financial stocks were under huge selling pressure after the opening bell as the S&P has lowered its ratings and also revised its outlooks on 22 banks. US Bancorp, Wells Fargo and Fifth Third were amongst those included in the ratings. The Consumer Price Index inclined by 0.1% which hardly affected the market sentiments.

Inflation for the week ended June 6 slipped to negative as it came in at -1.6%. The inflation slipped into negative territory for the first time since 1977-78. This was mainly due to high base effect and partly due to the economic slowdown. The annual rate of inflation came in at -1.61% (provisional) for the week ended June 6 as compared to 0.13 % (provisional) for the previous week ended 30 May and 11.66% during the corresponding week of the previous year. The WPI for all commodities was up 0.04% at 232.7 in the week ended June 6, 2009 from 232.6 in the previous week.

Among the Sensex pack 24 stocks ended in negative territory while 6 closed in negative. The market breadth indicating the overall health of the market remained weak as 2,094 stocks closed in red while 534 stocks closed in red while 56 stocks remained unchanged in BSE.

The BSE Sensex closed lower by 257.31 points or 1.77% at 14,265.53 and NSE Nifty fell by 104.75 points or 2.40% at 4,251.40. The BSE Mid Caps and Small Caps closed with losses of 144.21 and 214.10 points at 4,876.86 and 5,572.44. The BSE Sensex touched intraday high of 14,630.73 and intraday low of 14,188.25.

Losers from the BSE Sensex pack are ACC (8.25%), JP Associates (6.73%), Tata Steel (6.71%), Hindalco Inds (6.66%), Grasim Inds (6.14%), NTPC (5.33%) and ONGC (4.87%).

Gainer from the BSE Sensex pack is SBI (2.33%), Sun Pharma (1.54%), Tata Motors (1.34%) and Infosys (0.64%).

On the global markets front the Asian markets which opened before the Indian market, closed in red. Hang Seng, Strait Times, Nikkei, Seoul Composite and Taiwan Weighted closed lower by 1.70%, 1.51%, 1.39%, 1.11% and 0.83% at 17,776.66, 2,237.20, 9,703.72, 1,375.76 and 6,144.53 respectively.

European markets which opened after the Indian market are trading in negative. In Frankfurt the DAX index is trading lower by 0.17% at 4,791.97 and in London FTSE 100 is trading down by 0.66% at 4,250.30.

The BSE Realty index dropped (5.80%) or 196.37 points to close at 3,190.13. Main losers are Mahindra Life (9.33%), HDIL (9.36%), Penland (8.85%), Unitech (8.93%), India Bull Real (6.11%) and Akruti City (5%).

The BSE Metal index plunged (4.88%) or 551.12 points at 10,737.38. Scrips that mostly lost are JSW Steel (9.32%), Ispat Industries (7.99%), Jindal Saw (7.05%), Tata Steel (6.71%), Hindalco Industries (6.66%) and Hindustan Zinc (6.54%).

The BSE Power index ended lower by (3.83%) or 110.77 points at 2,781.45 as Suzlon Energy (10.51%), Torent Power (7.62%), Power Grid (7.37%), NTPC (5.33%) and Reliance Power (3.67%) ended in negative territory.

The BSE Capital Goods index fell (3.73%) or 454.01 points to close at 11,722.64. Losers are Punj Lloyd (7.55%), Praj Industries (7.12%), Elecon Engneering (4.93%), SKF India (4.22%), Lakshmi Machine Work (4.72%) and Jyoti Structure (4.80%).

The BSE Oil and Gas decreased (2.16%) or 205.93 points at 9,308.44. Losers are Aban Offshore (9.55%), RNRL (5.09%), ONGC (4.87%), Essar Oil (4.77%) and BPCL (3.48%).

The BSE Consumer Durables index declined (2.07%) or 59.87 points to close at 2,832.44. Losers are Rajesh Export (7.23%), Gitanjali Gems (4.85%), Videocon Industries (4.67%) and Titan Industries (0.41%).

The BSE Bankex index decreased (0.71%) or 57.34 points at 7,965.77. Losers are Allahabad Bank (3.14%), Indian Overseas Bank (2.97%), ICICI Bank (2.58%), Union Bank (2.38%) and Yes Bank (2.18%).

Tata Teleservices surged 3.94% to close at Rs36.90. Israel based ECI Telecom bagged a $70 mn contract from Tata Teleservices on Wednesday to deliver the fixed-broadband access network across India. ECI has already rolled out the service for Tata Tele in Hyderabad as well as Bangalore, Delhi, Ahmedabad, Vizag, Vijayawada, Surat and Baroda. The broadband solution of ECI would enable TTSL to offer triple-play services and applications such as IPTV as well as video on demand, high speed broadband internet, VoIP and other bandwidth intensive services.

Infosys Technologies inched up by 0.64% to Rs1721.45. The company has bagged a $10 million BPO deal from Microsoft. This is a three-year contract for back-end support such as data processing.

SBI shot up by (2.33%) to Rs. 1,702.20. The bank is planning to merge two of its little-known subsidiaries SBI Commercial and International Bank (SBICI), a wholly-owned subsidiary of SBI and factoring services provider Global Trade Finance (GTF) in which SBI owns a 92.60% stake