Post Market Commentary - July 17 2009

Indian market rebounded sharply from yesterday’s tedious trading to end the day with handsome gains on strong buying emerged across the board. Gains in European markets added to positive sentiments. The sentiments also boosted on comments from Finance Secretary Ashok Chawla that the government''s record market borrowing programme would not pressure bond yields as well as interest rates. Meanwhile, the Indian government raged up its borrowing plan by nearly a quarter for the fiscal first half to September 2009 to bridge its growing budget deficit. Further, market extended gains on revival on monsoon this month after weak start. Besides, increased capital inflows from funds on the back of encouraging quarterly results by the domestic companies also contributed to the rally. For the quarter ended June 30, the first set of 59 non-banking companies to announce results have reported a 21% year-on-year growth in net profit, the highest in four quarters. BSE Sensex ended above 14,700 level and NSE Nifty closed below 4,300 mark.

Market opened the today’s session on pleasant note tracking firm cues from the global markets. The US markets closed higher on Thursday on the back of better than expected results from JP Morhan Chase, IBM and Google. Moreover, on a macro economic front the Initial jobless claims for the week ending July 11 came in at 522,000, which is the lowest since January. Further, Indian benchmark indices continued to extend gains and ruled higher through out of trading session. During last trading hours market witnessed sharp rally to close near day’s high on the back some positive signals from the government for reforms and strong rally in the stocks all over the world. From the sectoral front, investors on-loaded positions across the sectors. Besides, Auto, Bank, IT, Tech, Realty, PSU, FMCG, Metal and Power stocks observed most of the buying from these baskets. BSE Mid Caps and Small Caps stocks also remained on buyers’ radar.

Among the Sensex pack 27 stocks ended in green territory and 3 in red. The market breadth indicating the overall health of the market remained positive as 1832 stocks closed in green while 825 stocks closed in red and 82 stocks remained unchanged in BSE.

The BSE Sensex closed higher by 494.67 points or (3.47%) at 14,744.92 and NSE Nifty ended up by 143.55 points or (3.39%) at 4,374.95. BSE Mid Caps and Small Caps closed with gains of 115.17 and 135.34 points at 5,105.59 and 5,680.90 respectively. The BSE Sensex touched intraday high of 14,800.70 and intraday low of 14,325.58.

Gainers from the BSE Sensex pack are Reliance Infra (8.44%), M&M Ltd (8.07%), JP Associates (7.20%), ICICI Bank (6.82%), Tata Motors (6.68%), Herohonda Motors (6.49%), Hindalco (6.31%), ITC Ltd (5.99%), HDFC (5.85%), Bharti Airtel (5.33%), Tata Power (5.03%), DFL Ltd (5.02%), SBI (4.19%), Infosys Tech (4.01%), HDFC Bank (3.64%) and Grasim Industries (3.62%).

Losers from the BSE Sensex pack are Sterlite Industries (0.42%), NTPC Ltd (0.15%) and Reliance (0.05%).

On the global markets front the Asian markets that opened before the Indian market, ended higher on better than expected earning from the US companies. Shanghai Composite, Hang Seng, Nikkei 225 index, Straits Times and Seoul Composite ended up by 6, 443.79, 51.16, 29.94 and 7.88 points at 3,189.74, 18,805.66, 9,395.32, 2,430.96 and 1,440.10 respectively.

European markets, which opened after the Indian market, are trading in green. In Frankfurt the DAX index is trading up by 37.94 points at 4,995.13 and in London FTSE 100 is trading higher by 35.85 points at 4,397.69.

The BSE Auto stocks surged (5.16%) or 248.86 points to close at 5,069.86. Major gainers are Exide Indus (11.19%), M&M Ltd (8.07%), Apollo tyre (7.14%), Ashok Leyland (7.09%) and Herohonda Motors (6.49%).

The BSE Bank index advanced by (4.76%) or 369.47 points at 8,132.16 after the Finance Minister said early this week that the government is committed to financial sector reforms. Scrips that gained are Canara Bank (7.75%), ICICI Bank (6.82%), Axis Bank (6.60%), Karnataka Bank (4.41%) and SBI (4.19%).

The BSE IT closed higher by (4.11%) or 138.27 points at 3,505.28 on hopes of a revival in US economy. Gainers are HCL Teck (11.21 %), Aptech Ltd (9.69%), Rolta India (9.42%), NIIT Ltd (7.01%) and Financ Tech (5.88%).

The BSE Teck ended up by (4.09%) or 106.57 points at 2,711.71. HCL Teck (11.21 %), Aptech Ltd (9.69%), Rolta India (9.42%), Zee Ent (7.44%) and Deccan Chr (7.25%) ended in green territory.

The BSE Realty index increased by (3.55%) or 114.73 points to close at 3,347.10. Main gainers are DLF Ltd (5.02%), Orbit Co (5.00%), Mahindra Life (4.95%), Housing Dev (4.17%) and Ansal Infra (4.02%).

The BSE PSU index gained (3.31%) or 260.52 points at 8,125.29. NMDC Ltd (9.61%), Hindustan Copper (7.86%), Canara Bank (7.75%), MMTC Ltd (7.17%) and Steel Authority (5.43%) ended in positive territory.

The BSE FMCG index went up by (3.02%) or 73.19 points at 2,499.86. Gainers are United Brew (6.89%), ITC Ltd (5.99%), Colgate Palm (2.01%), Ruchi Soya (1.44%) and Godrej Cons (0.98%).

PBA infrastructure closed higher by 18.59% after it bagged orders worth Rs 70.80 crore from Mumbai Metropolitan Region Development Authority.

HCL Tech gained 11.21%. HCL AXON, a division of the company, which provides Business Transformation consultancy and services through the innovative implementation and support of SAP technologies, announced a strategic partnership with UCS Group and a take over of the UCS Group''s Enterprise Solutions SAP practice. The acquired practice is a division of UCS Solutions and offers Tier 1 Retail and wholesale SAP project implementations.

Exide Industries Ltd zoomed 11.19% after net profit increased phenomenally 48.9% to Rs 122.40 crore in Q1 June 2009 as against Q1 June 2008.

Maytas Infra Ltd advanced by 4.95%. The company has bagged Jajpur and Midnapore projects in 2008 from Power Grid Corporation of India Limited (PGCIL), through competitive bid process and in its own right as a competent infrastructure company. Maytas has quickly mobilized the teams at most of the packages to execute the projects and currently the execution is progressing well.

Colgate Palmolive India Ltd ended up by 2.01%. The company has posted a net profit after tax of Rs 1027.80 million for the quarter ended June 30, 2009 as compared to Rs 719.20 million for the quarter ended June 30, 2008. Total Revenue has increased from Rs 4359.90 million for the quarter ended June 30, 2008 to Rs 4939.80 million for the quarter ended June 30, 2009.