Post Session Commentary - June 22 2009

Domestic market pared all its initial gains to close the day on downbeat note on sustained selling pressure seen in key stocks. Market turned southward and continued to extend losses tracking lower European markets along with weak US index futures. Benchmark indices exhibited volatility during the trading as June futures and options contracts due to expire on coming Thursday. BSE Sensex ended below 14,400 level and NSE Nifty below 4,300 mark. On the sectoral front, Oil & Gas, Power, Realty, Metal, PSU and Teck stocks contributed to most of the selling pressure. However, FMCG, Capital Goods and Bank stocks remained in limelight as witnessed most of the buying from these baskets.

The market today opened significantly higher along with other Asian markets. Moreover, the US Markets closed mixed on Friday. There was slow news that kept the markets in a lackluster trade. Further, Indian benchmark indices lost ground soon after start and turned volatile ahead of the expiry of the derivatives contracts for June on coming Thursday. However, market recovered and witnessed a sharp rebound though once again slipped into negative during mid session. Stocks continued to extend losses after negative opening of European Markets led by the World Bank’s prediction that the global economy will shrink 2.9% this year, which will be a deeper fall than the 1.7% reduction it forecasted in March 2009. Finally, market extended last session’s weakness and closed with losses on account of intense selling pressure.

Among the Sensex pack 23 stocks ended in negative territory while 7 closed in positive. The market breadth indicating the overall health of the market remained negative as 1,493 stocks closed in red while 1114 stocks closed in green while 68 stocks remained unchanged in BSE.

The BSE Sensex closed lower by 195.67 points or 1.35% at 14,326.22 and NSE Nifty ended down by 78.35 points or 1.82% at 4,235.25. The BSE Mid Caps and Small Caps closed with gains of 28.22 and 18.39 points at 4,930.51 and 5,599.57. The BSE Sensex touched intraday high of 14,668.40 and intraday low of 14,269.77.

Losers from the BSE Sensex pack are Tata Power (4.89%), Grasim Industries (4.57%), Reliance Infra (4.33%), Reliance (4.27%), Hindalco (4.15%), M&M Ltd (3.80%), NTPC Ltd (3.58%), Ranbaxy Lab (3.44%), Tata Motors (3.39%) and TCS Ltd (2.91%).

Gainers from the BSE Sensex pack is ICICI Bank (1.84%), ITC Ltd (1.55%), Maruti Suzuki (1.45%), L&T Ltd (0.96%), HDFC (0.31%), JP Associates (0.25%) and BHEL (0.24%).

On the global markets front the Asian markets which opened before the Indian market, closed mostly in green amid optimism about China. Chinese premier, Wen Jiabao, said the economy was improving. He said Beijing will maintain an easy credit policy to support growth. Shanghai Composite, Hang Seng, Nikkei and Seoul Composite closed higher by 15.81, 138.62, 40.01 and 16.37 points at 2,896.30, 18,059.55, 9,826.27 and 1,399.71 respectively. However, Strait Times lost 6.26 points at 2,266.92.

European markets which opened after the Indian market are trading in negative. In Frankfurt the DAX index is trading lower by 54.63 points at 4,784.83 and in London FTSE 100 is trading down by 42.50 points at 4,303.43.

The BSE Oil & Gas index declined (3.33%) or 312.45 points to close at 9,074.74 on reports that Oil and Gas producers could be forced to pay royalties to the government on the basis of sale prices in the future that will have an impact on oil companies. Losers are Reliance Natural Resources (4.70%), Reliance Petroleum (4.30%), Reliance (4.27%), Cairn Ind (2.67%) and Cairn Ind (2.02%).

The BSE Power index ended lower by (2.47%) or 69.90 points at 2,761.86. Losers are Tata Power (4.89%), GMR Infra (4.84%), Reliance Infra (4.33%), NTPC Ltd (3.58%) and Reliance Power (3.13%).

The BSE Metal index decreased by (2.38%) or 262.84 points at 10,776.15. Scrips that lost are Nalco (4.84%), Jai Corp Ltd (4.30%), Ispat Industries (4.16%), Hindalco (4.15%) and JSW Steel (3.35%).

The BSE Realty index lost (2.33%) or 76.80 points to close at 3,213.80. Main losers are Anant Raj (5.00%), Sobha Dev (4.14%), Pheonix Mill (3.91%), Unitech Ltd (3.18%) and Housing Dev (3.13%).

The BSE FMCG index closed up by (0.49%) or 11.12 points at 2,272.51 on hopes that the government will focus on the rural sector in budget as United Brew (3.03%), Dabur India (2.05%), ITC Ltd (1.55%) and Marico Ltd (0.63%) ended in positive territory.

The BSE Capital Goods index advanced by (0.36%) or 43.91 points to close at 12,303.85. Gainers are Everest Kanto (9.17%), BEML Ltd (6.74%), Gammon Indi (4.98%), Punj Lloyd (3.67%) and Bharat Bijli (2.69%).

Oil & Natural Gas Corporation (ONGC) closed down by 1.62%. ONGC has made three oil and gas discoveries. It has found oil in the Cambay basin, oil and gas in Matar area in Vadodara district (Gujarat) and gas in the Krishna-Godavari (KG) basin, according to the sources.

Reliance Communication ended lower by 2.85%. The company has started preliminary talks with China Mobile, the world’s largest mobile company, for a strategic alliance and possible equity participation of 5 to 6%.

DLF lost 2.27%. The company is to planning to raise $300 million through external commercial borrowing (ECB). The funds rose to be invested in its integrated township projects.

Tech Mahindra ended lower by 2.69%. The company which bought a controlling stake in Satyam has now rebranded Satyam Computer Services as Mahindra Satyam.

ABB Ltd dropped slightly 0.57% to Rs. 742.70. The company secured an order worth Rs 55 crore.

McNally Bharat Engineering Company Ltd spurted 4.95%, after the company bagged an order worth Rs 30.60 crore.

ABG Shipyard Ltd gained 3.25% to Rs. 212.95 after consolidated net profit surged 47.1% to Rs. 171.15 crore in the year ended March 2009 over the year ended March 2008.