Post Session Commentary - Aug 17 2009

The domestic market today nosedived deep into red terrain on huge selling pressure over the ground as unsatisfactory US consumer sentiment report weakened concerns about the recovery in global economy. Market closed near day’s low tracking negative European markets. In addition, weak Asian markets along with lower US index futures also took huge beating on the bourses. Meanwhile, benchmark indices also exhibited weakness on monsoon worries as the country is going towards the worst drought year over the last two decades. The BSE Sensex ended below 14,800 level and NSE Nifty closed below 4,400 mark.

Market extended its previous session’s losses as opened in negative mirroring unfavorable global markets. The Asian stocks were in deep red today and US stocks markets closed lower on Friday, backed by the August consumer sentiment survey. A disappointing report on consumer sentiment sent the benchmark indices in the red as revealed that sentiment unpredictably declined to 63.2, the lowest level since March. Further, Indian benchmark indices continued to extend losses as selling emerged across the counters. There was not a single hope of recovery during the trading on weak sentiments led by losses in Asian and US stocks. During final trading hours, market slipped sharply and widened its negative gap to end the day with huge losses on intense selling pressure over the stocks. From the sectoral front, investors offloaded positions across the sectors. Besides, Realty, Metal, Auto, Oil & Gas, Bank, Capital Goods, FMCG and Consumer Durables stocks contributed to most of the selling pressure. Broader markets also supported the negative sentiments as BSE Midcap and Smallcap stocks lost more than 3% each.

Among the Sensex pack all 30 stocks ended in red territory. The market breadth indicating the overall health of the market remained negative as 1929 stocks closed in red while 674 stocks closed in green and 73 stocks remained unchanged in BSE.

The BSE Sensex closed lower by 626.71 points or (4.07%) at 14,784.92 and NSE Nifty ended down by 24.95 points at 4,580.05. BSE Mid Caps and Small Caps closed with losses of 218.30 and 200.85 points at 5,385.51 and 6,211.71 respectively. The BSE Sensex touched intraday high of 15,284.23 and intraday low of 14,740.63.

Losers from the BSE Sensex pack are DLF Ltd (7.75%), Hindalco (7.35%), Tata Steel (6.82%), Sterlite Industries (6.69%), Tata Motors (6.67%), JP Associates (6.31%), Reliance Infra (6.15%), Herohonda Motors (5.92%), ITC Ltd (5.56%), M&M Ltd (5.31%), ICICI Bank (5.28%), Maruti Suzuki (5.18%), RCom (5.07%), L&T Ltd (5.00%), ACC Ltd (4.84%), ACCL Ltd (4.69%), Reliance (4.66%), ONGC Ltd (4.59%), Sun Pharma (3.39%) and Infosys Tech (2.78%).

On the global markets front the Asian markets that opened before the Indian market, ended in deep red. Shanghai Composite, Hang Seng, Nikkei 225, Singapore''s Straits Times Index and Seoul Composite closed lower by 176.34, 756.26, 328.72, 85.53 and 44.35 points at 2,870.63, 20,137.07, 10,268.61, 2,545.98 and 1,547.06 respectively. Chinese stocks plunged to their lowest level on renewed worries over the economic outlook and government policy. However, Japan’s economy made a sharp turnaround in the second quarter (April-June) as it expanded at an annual pace of 3.7% on a strong rebound in exports. Exports grew 6.3% from the previous quarter, the highest growth since the second quarter of 2002 though it failed to produce a positive revelation.

European markets, which opened after the Indian market, are trading in red tracking Wall Street losses overnight. In Frankfurt the DAX index is trading lower 97.90 points at 5,211.21 and in London FTSE 100 is trading down by 79.28 points at 4,634.39.

The BSE Realty index lost (7.58%) or 300.36 points at 3,662.70 on profit taking. Losers are Pheonix Mill (12.69%), Housing Dev (9.19%), Parsvnath (8.02%), DLF Ltd (7.75%) and Unitech Ltd (7.70%).

The BSE Metal index closed tumbled (6.15%) or 781.93 points at 11,938.91 after LMEX, a gauge of six metals traded on the London Metal Exchange, fell 3.05% last Friday. Losers are Hindalco (7.35%), JSW Steel (7.08%), Tata Steel (6.82%), Sterlite Industries (6.69%) and Jindal Steel (6.66%).

The BSE Auto index lost (4.77%) or 265.72 points at 5,303.50 on worries arising from scanty rains as auto firms derive larger revenue from rural India. Main losers are Tata Motors (6.67%), Bharat Forge (6.45%), Apollo Tyre (6.12%), Herohonda Motors (5.92%) and M&M Ltd (5.31%).

The BSE Oil & Gas index dropped by (4.42%) or 436.70 points at 9,432.51 oil prices extended losses. Losers are Aban Offshore (6.69%), Essar Oil Ltd (5.97%), Cairn Ind (4.98%), RNRL (4.91%) and Reliance Petroleum (4.68%).

The BSE Bank index dropped by (4.42%) or 436.70 points at 7,947.87. Scrips that lost are Kotal Bank (7.30%), IDBI Bank (5.55%), ICICI Bank (5.28%), Canara Bank (5.13%) and SBI (4.69%).

The BSE FMCG index ended down by (4.07%) or 103.86 points at 2,448.94 as United Spr (6.05%), ITC Ltd (5.56%), United Brew (4.95%), Tata Tea (4.60%) and Godrej Cons (4.43%) ended in red.

Bank of Baroda lost 3.21%. The bank revealed that it is likely to start life insurance venture with the UK-based Legal and General Group is expected in the next seven months.

Krypton Industries Ltd ended lower by 2.28%. The company has informed that the Board of Directors of the Company at its meeting held on August 14, 2009 took a decision to raise an Amount not exceeding Rs 11 Crore by issue of shares on right basis at such price as may be decided later by board.

LIC Housing Finance closed down by 3.66%. With effect from August 1, LIC Housing Finance cut interest rates for new loans by 0.5% where for customers opting for floating rate loans between Rs 30 lakh and Rs 75 lakh, the new rates will be 8.755 against 9.25%.
Berger Paints (India) Ltd fell 4.28% despite its board approved issuing 72 lakh shares of a face value of Rs 2 each to Nalanda India Fund.

Provogue India Ltd lost 3.14% after its board approved spending Rs. 50 crore to buy back 50 lakh shares at up to Rs 100 each.

KSK Energy Ventures Ltd tumbled 4.29%. The company said it will seek shareholders approval to raise as much as Rs 2000 crore by selling preferential shares.

Hindalco Industries ended down by 7.39%. The company has closed the Rogerstone (UK) operations of its Canadian subsidiary, resulting in 400 job losses. The plant was in deep trouble like Corus'' Teesside cast outfit, so nobody protested against the closure, said sources in the know.