Post Session Commentary - July 22 2009

Indian market slumped sharply to close on a featureless note due to huge selling pressure led by heavy profit booking after a recent rally. Negative European markets contributed largely to the southward journey. Additionally, lower US index futures also weighed on sentiments. However, market witnessed gain in early trade on positive cues from global markets. In domestic arena, news that the government can bring a good amount this year from divestment also contributed to upward movement in equities. During the trading, stocks exhibited volatility on concern of the progress of India''s annual monsoon. BSE Sensex ended below 14,900 level and NSE Nifty closed around 4,400 mark.

Market opened on positive note tracking firm cues from the global markets. Most of the Asian markets opened in green and on Tuesday, the US markets closed higher on the back of good earnings report. The US stocks once again acclimated on the back of solid earnings report from Caterpillar that reported second quarter earnings per share of $0.72, which was $0.50 better than consensus estimates. Domestic investors’ took fresh position on the frontline stocks on growing optimism about the recovery in the world economy that led market to trade in green till mid session. Further, benchmark indices were unable to unable to hold the momentum and slipped on profit taking. The huge selling pressure was mainly led by negative European stocks along with lower US index futures. Market continued to stay in red till end on sustained selling across the board since afternoon trade. From the sectoral front, all indices ended in red. Besides, most of the selling was seen in Capital Goods, Auto, Power, IT, Teck, Metal, Pharma and Bank stocks. Broader market indices also remained out of favour as BSE Mid Cap and BSE Small Cap indices also witnessed selling pressure.

Among the Sensex pack 26 stocks ended in red territory and 4 in green. The market breadth indicating the overall health of the market remained negative as 1374 stocks closed in red while 1231 stocks closed in green and 99 stocks remained unchanged in BSE.

The BSE Sensex closed lower by 219.37 points or (1.46%) at 14,843.12 and NSE Nifty ended down by 70.20 points or (1.57%) at 4,398.90. BSE Mid Caps and Small Caps closed with losses of 50.47 and 20.46 points at 5,174.74 and 5,817.36 respectively. The BSE Sensex touched intraday high of 15,369.42 and intraday low of 14,789.58.

Losers from the BSE Sensex pack are HDFC (4.43%), Hindalco (3.44%), Reliance Infra (3.36%), Grasim Industries (3.32%), Tata Steel (3.27%), JP Associates (2.95%), BHEL (2.89%), TCS Ltd (2.42%), RCom (2.17%), ACC Ltd (2.02%), Reliance (1.99%), Maruti Suzuki (1.83%), Bharti Airtel (1.76%) and Herohonda Motors (1.66%).

Gainers from the BSE Sensex pack are ONGC Ltd (4.60%), Sterlite Industries (0.91%), DLF Ltd (0.79%) and NTPC Ltd (0.44%).

On the global markets front the Asian markets that opened before the Indian market, ended mixed. Hang Seng and Straits Times ended lower by 253.53 and 3.50 points at 19,248.17 and 2,450.83 respectively. However, Shanghai Composite, Nikkei 225 and Seoul Composite gained 83.41, 71.14 and 5.05 points at 19,248.17, 9,723.16 and 1,494.04 respectively.

European markets, which opened after the Indian market, snapped seven-day winning streak and are trading in red. In Frankfurt the DAX index is trading down by 21.94 points at 5,072.03 and in London FTSE 100 is trading lower by 12.86 points at 4,468.31.

The BSE Capital Goods index tumbled (1.87%) or 231.60 points at 12,141.46. Bharat Elect (5.71%), Thermax Limited (5.41%), Punj Lloyd (3.44%), ABB Ltd (3.24%) and Jyoti Struct (3.18%) closed in negative territory.

The BSE Auto index dropped by (1.61%) or 83.16 points at 5,077.90. Scrips that lost are Excide Indus (5.01%), Gammon Indi (4.03%), Ashok Leyland (2.99%), Escorts Ltd (2.10%) and Bajaj Auto (1.92%).

The BSE Power index decreased by (1.60%) or 45.31 points to close at 2,783.87. Main losers are Reliance Infra (3.36%), ABB Ltd (3.24%), BHEL (2.89%), Crompton Greaves (2.26%) and Neyveli LIG (2.09%).

The BSE IT index ended lower by (1.60%) or 59.04 points at 3,634.99. Losers are Tech Mahindra (5.07%), HCL Tech (4.88%), Rolta India (4.73%), NIIT Ltd (3.68%) and Patni Computer (2.73%).

The BSE Teck closed down by (1.54%) or 43.13 points at 2,758.42. are Tech Mahindra (5.07%), HCL Tech (4.88%), Rolta India (4.73%), Adlabs Films (4.40%) and IOL Netcom (4.37%) ended in red territory.

The BSE Metal stocks lost (1.45%) or 166.40 points to close at 11,345.61. Major losers are Ispat Industries (4.40%), Hindalco (3.44%), Stata Steel (3.27%), Steel Authority (3.26%) and Sesa Goa Ltd (2.45%).

Wipro Ltd dropped by 1.52% despite reporting impressive rise of 119.40 per cent in its net profit to Rs 11,979 million for the quarter ended June 30, 2009 as compared to Rs 5,460 million for the quarter ended June 30, 2008.

Infosys Technologies Ltd lost 1.23%. The company has been awarded the eBiz Project by the Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry, Government of India. The eBiz Project is among the 27 Central, State and Integrated Mission Mode Projects (MMPs) under the National E-Governance Plan (NEGP) of the Government of India.

Reliance Communications lost 2.17%. The company and Etisalat DB announced a long-term passive infrastructure sharing agreement, which will accelerate Etisalat DB Telecom''s forthcoming rollout of telecom services in India. As per agreement, Etisalat DB and its subsidiary would outsource their Telecom infrastructure requirements for the 15-telecom circles, encompassing end-to-end tower and transmission infrastructure to Reliance Infratel Limited and Reliance Communications Limited, respectively.

Thermax Limited fell 5.41%. The company and GE Water, USA, have signed agreements to expand the role that both companies will play in meeting India''s growing water quality and availability challenges.

Canara Bank ended down by 2.08%. The bank posted a net profit of Rs 5553.30 million for the quarter ended June 30, 2009 as compared to Rs 1226.80 million for the quarter ended June 30, 2008.

Spice Communications plunged 2.16%. The company posted a net loss of Rs (349.10) million for the quarter ended June 30, 2009 as compared to net loss of Rs (1364.50) million for the quarter ended June 30, 2008.

Brahmaputra Infraproject Limited gained 4.92%. The company has bagged two orders amounting to Rs. 433 crores from Jaiprakash Associates Limited for the construction of Yamuna Expressway connecting Greater Noida to Agra.

ING Vysya Bank Ltd zoomed 8.55% after net profit increased phenomenally 48.3% to Rs. 60.26 crore in Q1 June 2009 as against Q1 June 2008.