Post Session Commentary - July 8 2009

Indian markets slipped sharply to close the day in deep red on global slide. Profit taking also contributed to the southward journey as investors selected to book profit in keys stocks after previous session’s rise. Benchmark indices exhibited volatility with unsuccessful trial to reduce losses during afternoon trade on some recovery in other Asian stocks. Reports that government will have disinvestment plan in around three months to fill the gap of fiscal deficit also contributed to small revival. However, fresh bouts of strong selling took huge beating on the bourses. BSE Sensex ended below 13,800 level and NSE Nifty closed below 4,100 level.

The market tumbled since initial bell amid unfavorable cues from the markets all over the world. The Asian markets were sharply lower during initial trading and the US stocks markets closed in deep red on Tuesday due to growing concerns about the economic recovery. Moreover, the traders dumped shares ahead of start of the quarterly reporting period. Further, the domestic stocks plunged stridently lower on huge selling emerged over the ground. The benchmark indices continued trade in negative zone despite witnessing little gain during afternoon trade. During final trading hours, market lost further ground to shatter with huge losses on heavy sell off. Negative opening of European market along with selling by foreign funds in domestic arena also weighed on the sentiments. Of the 13 sectoral indices on the BSE, all indices ended in red. Among those, Realty, Capital Goods, Metal, Bank, Power, Consumer Durable, Teck and Oil & Gas stocks witnessed most of the selling pressure form these baskets. BSE Mid Cap and Small Cap stocks also followed the same trend.

Among the Sensex pack 24 stocks ended in red territory and 6 in green. The market breadth indicating the overall health of the market remained weak as 1980 stocks closed in red while 563 stocks closed in green and 59 stocks remained unchanged in BSE.

The BSE Sensex closed lower by 401.30 points or 2.83% at 13,769.15 and NSE Nifty ended down by 123.25 points or 2.93% at 4,078.90. BSE Mid Caps and Small Caps closed with losses of 181.50 and 206.92 points at 4,782.84 and 5,337.35 respectively. The BSE Sensex touched intraday high of 14,039.58 and intraday low of 13,701.76.

Losers from the BSE Sensex pack are Tata Steel (8.93%), Sterlite Industries (8.38%), DLF Ltd (7.68%), Reliance Infra (7.04%), L&T Ltd (5.84%), ICICI Bank (5.82%), JP Associates (5.58%), BHEL (4.19%), ONGC Ltd (3.89%), RCom (3.57%), HDFC Bank (3.49%), SBI (3.02%), Bharti Airtel (2.30%), Infosys Tech (1.93%), HDFC (1.86%) and M&M Ltd (1.80%).

Gainers from the BSE Sensex pack are ACC Ltd (3.09%), Maruti Suzuki (3.13%), Herohonda Motors (1.51%), Grasim Industries (1.20%), NTPC Ltd (0.98%) and Tata Motors (0.46%).

On the global markets front the Asian markets that opened before the Indian market, ended lower on growth concern as an unexpected drop in Japanese machinery orders raised concern that a recovery in global economy will weaken. Shanghai Composite, Hang Seng, Nikkei 225, Straits Times index and Seoul Composite ended lower by 8.68, 141.20, 227.04, 12.49 and 3.18 points at 3,080.77, 17,721.07, 9,420.75, 2,259.77 and 1,431.02 respectively.

European markets, which opened after the Indian market, are trading in red. In Frankfurt the DAX index is trading down by 13.78 points at 4,584.41 and in London FTSE 100 is trading lower by 1.73 points at 4,185.27.

The BSE Reality index underperformed the benchmark indices and closed with decrease of (8.47%) or 269.51 points at 2,912.63. Scrips that lost are Unitech Ltd (10.81%), Indiabull Real (9.74%), Ansal Infra (9.41%), Omaxe Ltd (9.22%) and Parsvnath (8.36%).

The BSE Capital Goods index tumbled (5.05%) or 621.53 points to close at 11,680.32. Losers are Suzlon Energy (10.26%), Elecon Eng C (9.94%), Punj Lloyd (8.83%), Walchand In (8.15%) and Reliance Industrial Infra (7.88%).

The BSE Metal ended down by (4.22) or 444.61 points at 10,101.66 after LMEX, a measure of six metals traded on the London Metal Exchange, fell 1.18% overnight. Losers are Jai Corp Ltd (9.98%), Tata Steel (8.93%), Sterlite Industries (8.38), Ispat Industries (7.96%) and LSW Steel (6.71%).

The BSE Bank stocks dropped by (4.09%) or 319.13 points to close at 7,485.53 as the government skipped financial sector reforms in the Budget. Major losers are Canara Bank (9.81%), ICICI Bank (5.82%), IDBI Bank (5.36%), Kotak Bank (5.12%) and Oriental Bank (5.06%).

The BSE Power index lost (3.64%) or 100.73 points to close at 2,669.77. Losers are Suzlon Energy (10.26%), Reliance Infra (7.04%), GMR Infra (6.08%), Siemens Ltd (5.79%) and ABB Ltd (5.19%).

The BSE Consumer Durable index ended lower by (2.98%) or 87.71 points to close at 2,857.97. Rajesh Export (9.66%), Gitanjali GE (8.78%), Videocon Ind (5.47%), Titan Ind (1.26%) and Blus Star L (0.34%) ended in negative territory.

Lanco Infratech Ltd dropped by 4.15%. The company has received Letter of Intent (LOI) from Footwear Design & Development Institute (FDDI), Ministry of Commerce & Industry, Government of India for the Construction and Development of FDDI at E-1, Sipcot Industrial Park, Irungattukottai, Kancheepuram, Tamil Nadu of a Total Contract Value of Rs 52.30 Crores.

MindTree lost 5.66%. The company announced the availability of its Knowledge Management {KM) solution for the manufacturing industry. The MindTree KM offering is designed to help manufacturing organizations systematically collect, manage and execute the numerous ideas and suggestions of its workforce, resulting in innovative solutions, higher productivity, and faster response and delivery times.

Geometric Limited ended lower by 6.16%. The company disclosed the release of NestLib 2009 R2. In addition to a number of enhancements, this version offers a new Edge Matching feature for the wood working industry, to help in the creation of wooden floorings and rooftops.

Bank of Maharashtra (BoM) dropped by 2.18%. The bank reduced its benchmark prime-lending rate (BPLR) by 0.25 per cent to 12.25 per cent from 6th July. Besides, the bank has also cut interest rates on its domestic term deposits by up to 0.50 per cent from 1st July.

Sun Pharmaceutical Industries Ltd lost 0.09%. The company announced that USFDA has granted its subsidiary an approval for an abbreviated New Drug (ANDA) for generic Casodex, bicalutamide tablets.

Tata Steel ended lower by 8.93%. The company has announced that in the month of June 2009 it has achieved a significant growth in its hot metal as well crude steel and saleable steel production over the same month last year. The company has reported 19% growth in sales volume to 4.97 lakh tonnes as against 4.19 lakh tonnes in the same month previous year. In line with this, the sales volume rose 22% to 14.18 lakh tonnes in the first quarter of FY10 as 11.59 lakh tonnes in first quarter of FY09.