Post Session Commentary - July 3 2009

Indian market rebounded from initial lows to end the day with decent gains after Railway Minister Mamata Bannerjee presented the populist Railway Budget for 2009-2010. Market, overlooked the unfavorable cues from the market all over the world as she had promised to attend the concerns of average passengers. Consequently, the rail budget mainly focused on passenger’s amenities with introduction of new trains. In addition, she announced a number of new initiatives including a plan to develop important stations with world-class amenities amid keeping freight rates and passenger fare unchanged. Notably, the Union Budget 2009-2010 will be presented on Monday, 6 July 2009. BSE Sensex ended above 14,900 level and NSE Nifty above 4,400 mark.

The market opened on negative note tracking unfavorable cues from the global markets. The US stocks markets on Thursday ended with huge losses on the back of worse than expected Non-farm payroll job losses. The selling pressure erupted after the news of the June Nonfarm Payrolls report, which indicated that 467,000 jobs were lost in the month. Though, domestic market gained some ground and recovered from initial lows with recovery in some Asian stocks. Further, the benchmark indices were hovering near the dotted line till mid session with a bit of volatility. Going ahead, stocks made sharp turnaround during afternoon trade and maintained upward movement till end as Railway Budget for current fiscal cheered the market. From the sectoral front, all indices ended in positive. Among those, Bank, Pharma, Capital Gooda, Power, Oil & Gas, Realty and PSU stock witnessed most of the buying from these baskets. Mid Cap and Small Cap stocks also followed the same trend.

Union Railway Minister Mamata Banerjee today (3rd July 2009) presented the Railway Budget for current fiscal 2009-2010. This was her first rail budget for the newly constituted United Progressive Alliance. In her speech she told to focus on passenger amenities, safety and punctuality, to develop 50 stations with international facilities, depute at least one doctor in long distance trains, etc. Several new trains are planned to be started with objective to the increase in frequency of trains in key routes. ‘Turant’ trains will be introduced, which will be non-stop point-to-point non-air conditioned trains. Besides, ‘Yuva’ trains for young generation will also be introduced. In addition, Minimum Tatkal fee has been reduced from Rs 150 to Rs 100. Tatkal fee will be a percentage of the fair. Further, there is also plan to set up a 1000 MW power plant.

Among the Sensex pack 25 stocks ended in green territory and 5 in red. The market breadth indicating the overall health of the market remained positive as 1341 stocks closed in green while 1263 stocks closed in red and 82 stocks remained unchanged in BSE.

The BSE Sensex closed higher by 254.56 points at 14,913.05 and NSE Nifty ended up by 75.40 points at 4,424.45. BSE Mid Caps closed with gains of 42.95 and 24.71 points at 5,187.22 and 5,824.95 respectively. The BSE Sensex touched intraday high of 14,945.85 and intraday low of 14,499.74.

Gainers from the BSE Sensex pack are HDFC (7.74%), Tata Steel (4.32%), M&M Ltd (3.59%), Reliance Infra (3.17%), ICICI Bank (3.05%), JP Associates (3.03%), SBI (2.94%), L&T Ltd (2.82%), NTPC Ltd (2.25%), Tata Motors (2.11%), Bharti Airtel (1.64%), BHEL (1.50%) and Tata Power (1.47%).

Losers from the BSE Sensex pack are Herohonda Motors (1.08%), Hindalco (0.95%), Sterlite Industries (0.74%), RCom (0.24%) and ITC Ltd (0.03%).

On the global markets front the Asian markets which opened before the Indian market, ended mixed. Shanghai Composite, Hang Seng and Seoul Composite closed up by 28.11, 25.35 and 8.56 points at 3,008.37, 18,203.40 and 1,420.04 respectively. However, Nikkei 225 and Straits Times index ended lower by 60.08 and 21.07 points at 9,816.07 and 2,299.75 respectively.

European markets, which opened after the Indian market, are trading in red. In Frankfurt the DAX index is trading lower by 2.87 points at 4,715.62 and in London FTSE 100 is trading down by 3.53 points at. 4,230.74.

The BSE Bank stocks gained (2.19%) or 181.63 points to close at 8,459.70 on hopes of financial sector reforms in the forthcoming budget. Major gainers are Punjab National Bank (3.94%), Oriental Bank of Commerce (3.30%), Union Bank (3.28%), ICICI Bank (3.05%) and SBI (2.94%).

The BSE Capital Goods index jumped (1.90%) or 242.75 points to close at 13,013.06 on hopes the government may boost spending on the infrastructure sector in the upcoming Budget. Main gainers are Jyoti Struct (5.00%), L&T Ltd (2.82%), Thermax Ltd (2.64%), Suzlon Energy (2.40%) and Everest Kanto (2.22%).

The BSE Power index ended up by (1.84%) or 53.04 points at 2,930.23. Gainers are Lanco Infra (4.38%), GVK Power (3.96%), Reliance Infra (3.17%) and Power Grid (2.69%).

The BSE Pharma index advanced by (1.80%) or 64.67 points to close at 3,654.91. Gainers are Glenmark Pharma (7.90%), Cipla Ltd (4.77%), Ranbaxy Lab (3.53%), Aurobindo Pharma (3.16%) and Glaxosmith (2.25%).

The BSE Realty index gained (1.18%) or 40.05 points at 3,435.23. Scrips that gained are Anant Raj (4.96%), Housing Dev (2.74%), Pheonix Mill (1.94%), Indiabull Real (1.83%) and Unitech Ltd (1.52%).

The BSE Oil & Gas index increased by (0.96%) or 91.24 points at 9,597.26. RNRL (6.84%), HPCL (3.50%), Aban Offshore (2.49%), IOC Ltd (2.41%) and Gail India (1.87%) ended in positive territory.

NTPC Ltd gained 2.25% on reports it is in talks with Japan Bank for International Cooperation for a loan of $500 million for energy-efficient power projects. Also, it witnessed gains after Railway budget proposes 1,000 MW power plant in a tribal area in Andhra Pradesh.


Sun Pharmaceutical Industries Ltd. increased by 0.42%. The company announced receipt of a tentative approval from USFDA for Sun Pharma''s Abbreviated New Drug Application (ANDA) for generic Optivar, azelastine ophthalmic solution, 0.05%.

Orchid Chemicals & Pharmaceuticals Ltd (Orchid) gained 0.37%. The company has received approval from die US FDA for its ANDA (Abbreviated New Drug Application) for Amlodipine Besylate Tablets, 2,5 mg, 5 mg and 10 mg.

Ranbaxy Laboratories ended up by 3.53%. The drug maker has received US health rulators approval for oral solution Oxcarbazepine, used in treatment of epilepsy and bipolar disorder.

Cairn India Ltd shrunk 2.07% to after crude oil prices slumped nearly 4% on the New York Mercantile Exchange on Thursday, 2 July 2009.

JSW Steel Limited dropped by 0.25%. The company posted a 45% growth in crude steel production in Q1 FY 2009-10. The growth in rolled products in flat and iong products was 47% and 103% respectively.