Post Session Commentary - June 4 2009

The domestic stock market made a smart turnaround in the final hours after a gap down opening to close the session with decent gains. The investors sentiments was boosted on the back of UPA government’s focus to revive the economic growth, which was disclosed in its agenda. This led the BSE benchmark index Sensex to cross the psychological 15,000 mark in the last hours of the session. Also the falling of the India inflation figure to 0.48% from the previous week annual rise of 0.61% also supported the sentiments.

The domestic key benchmark indices opened on a negative note tracking the weakness in the global markets but the market changed its gears after President Pratibha Patil in her first address to the joint session of both houses of the Parliament said, that the government will focus on sectors like small and medium enterprises (SMEs), exports, textiles, commercial vehicles, infrastructure and housing as they are adversely hit by the global financial meltdown. Further the government''s stake in public sector units (PSUs) will not fall below 51%. Also the firm European markets ahead of the interest rate decision from the Bank of England (BOE) and the European Central Bank (ECB) later in the day boosted the investors’ sentiments in the later half. Moreover, in the global arena, the US Markets closed negative. Some of the economic data like ISM and ADP employment report were less with surprise and inline with expectations. The ISM Services Index for the month of May recorded at 44.0, and was in-line with expectations, while factory orders for April increased 0.7%, below the forecasted figure of 0.9% increase. Nonfarm payrolls report from the ADP Employment Report showed 532,000 job losses for May which was also inline with the consensus forecast. However, benchmark indices witnessed a lot of volatility during the session with BSE Sensex finally closed above 15,000 mark and NSE Nifty above 4,570 mark. From sectoral front, investors on-loaded position across the sectors led by Realty, Capital Goods, Health Care and Power index while the Metal index face the heat.

Inflation fell to 0.48 per cent for the week ended May 23 lower than previous week annual rise of 0.61 per cent in the previous week even though the prices of essential food items like fruit, tea, cereals and pulses continued to be expensive. The wholesale price-based inflation was 8.90 per cent during the corresponding week a year ago. During the week, the prices of the maize, arhar, spices and fruit went up while ragi and barley declined.

Among the Sensex pack 21 stocks ended in positive territory and 9 in negative. The market breadth indicating the overall health of the market remained strong as 2,130 stocks closed in green while 688 stocks closed in negative and 55 stocks remained unchanged in BSE.

The BSE Sensex closed higher by 137.78 points or 0.93% at 15,008.68 and NSE Nifty closed up by 41.95 points or 0.93% at 4,572.65. The BSE Mid Caps and Small Caps closed with gains of 120.54 and 140.27 points at 5,446.08 and 6,525.19. The BSE Sensex touched intraday high of 15,026.03 and intraday low of 14,599.43.

Gainers from the BSE Sensex pack are Ranbaxy Labs (6.06%) followed by Sun Pharma (4.14%), HUL (3.73%), Reliance Infra (3.39%), L&T (3.30%) and DLF (3.30%).

Losers from the BSE Sensex pack are Sterlite Inds (5.91%), Hindalco Inds (3.54%), Tata Steel (3.53%), Wipro (1.26%) and Infosys Tech (1.15%).

On the global markets front the Asian markets which opened before the Indian market, closed in red. Seoul Composite, Taiwan Weighted, Nikkei, Hang Seng closed lower by 2.60%, 1.55%, 0.75% and 0.40% at 1,378.14, 6,786.06, 9,668.96 and 18,502.77.

European markets which opened after the Indian market are trading in green. In Frankfurt the DAX index is trading higher by 0.68% at 5,088.84 and in London FTSE 100 is trading flat at 4,382.83.

The BSE Realty index increased (3.29%) or 130.98 points to close at 4,116.99. Main gainers are Sobha Developers (9.99%), Mahindra Life (8.56%), Omaxe Ltd. (5.72%), Akruti City (4.99%) and Orbit Co (4.98%).

The BSE Capital Goods index surged (3.23%) or 392.30 points at 12,551.73. Scrips that mostly gained are Lakshmi Machine Works (28.60%), Everest Kanto (5.50%), BEML (5.64%), Punj Lloyd (4.69%) and L&T (3.33%).

The BSE Health Care index also ended higher by (2.60%) or 91.53 points at 3,610.24. Divi''s Lab (7.07%), Ranbaxy Laboratories (6.06%), Glenmark Pharma (4.54%), Sun Pharma (4.14%) and Dr. Reddy (4.01%) ended in positive territory.

The BSE Power index grew (2.30%) or 67.62 points to close at 3,003.22. Gainers are Torent Power (10.23%), Lanco Infra (9.41%), Suzlon Energy (8.19%), Neyivelli Lignite (5.71%) and Reliance Power (4.56%).

The BSE Bankex improved (1.32%) or 106.58 points at 8,164.65. Gainers are IDBI Bank (9.80%), AXIS Bank (2.60%), Kotak Bank (2.52%), ICICI Bank (2.02%) and yes Bank (1.92%).

The BSE FMCG index gained (0.94%) or 27.48 points to close at 2,935.60. Gainers are Marico (7.46%), Ruchi Soya (7.20%), Colgate Palmolive (7.17%), HUL (3.73%) and Nestle (1.96%).

The BSE Metal decreased (2.11%) or 251.67 points at 11,699.53. Losers are Sterlite Industries (5.91%), Nalco (3.73%), Tata Steel (3.53%), Hindalco Industries (3.54%), Sesa Goa (1.92%) and SAIL (1.86%).

Gujarat NRE surged 4.99% to close at Rs56.80. The company on Thursday said that it''''s Australian listed subsidiary- Gujarat NRE Minerals will acquire Australia-based Rey Resources Ltd in an all the stock deal. Gujarat NRE Minerals intends to make an off-market takeover offer for acquiring all the issued shares in Rey.

ICICI Bank galloped 2.02% to Rs734.25. The bank has announced a reduction of 0.50% in its Floating Reference Rate (FRR) applicable to floating rate retail loans (including floating rate home loans) with effect from June 05, 2009. The revised FRR will be 12.75% p.a. as against 13.25% p.a. at present. All the existing floating rate retail loan customers will be benefited by the reduction in FRR.

Bank of Baroda fell 2.02% to Rs411.55. The bank has informed that the Bank of Baroda, Indian Overseas Bank and Andhra Bank on June 04, 2009 have signed, a Joint Venture Agreement for setting up a Banking Subsidiary in Malaysia. The subsidiary is proposed to be named as India BIA Bank (Malaysia) Bhd. The shareholding pattern would be Bank of Baroda 40%, Indian Overseas Bank 35% and Andhra Bank 25%.

HCL Tech grew 0.52% to close at Rs174.40. HCL GmbH Germany, a 100% subsidiary of HCL Technologies Ltd. (HCL), a leading global IT services provider, has entered into a multi-year, multi-regional SAP ERP support services and projects engagement with The Linde Group, a world-leading gases and engineering Company.

Parsvnath Developers Ltd shot up 4.95% to close at Rs105.95. The company, Indias leading Real Estate Company having diversified portfolio has bagged a contract from Delhi Metro Rail Corporation (DMRC) for construction of a residential proj