Post Session Commentary - Aug 31 2009

The Indian market extended its losses towards the closing to end the session on negative note on sustained selling pressure during the trading. Unfavorable cues from the Asian markets along with negative European stocks took huge beating on the bourses. Chinese stocks plunged 6.74% on continued worries about the impact of fragile bank lending on the economy. Lower US Index futures also fueled the negative sentiments that off set the positive news from domestic arena that India’s economic growth accelerated for the first time since 2007. India’s gross domestic product expanded 6.1% in the first quarter ended June 30 2009 from 7.8% of the corresponding period of previous year. The BSE Sensex ended below 15,700 level and NSE Nifty closed below 4,700 mark.

Market opened the first day week on downbeat note tracking weak Asian stocks. The US stock markets closed mixed on Friday, despite some positive news from technology companies. The day started with better than expected earnings announcement from key tech players like Dell, Marvell Tech and Intel. However, it could not last longer amidst profit booking pressures. Further, Indian stocks continued to extend losses on strong selling pressure over the ground. Though, market tried to recover on 6.1% rise in country’s GDP for the first quarter but was unable to gather the momentum and continued to remain lower. Market weakened further to close the day in red in line with sharp fall in Chinese stocks. From the sectoral front, IT, Metal, Teck, Oil & Gas, Capital Goods, FMCG and Pharma stocks contributed to most of the selling pressure. However, Relaty and Auto stocks remained in limelight as witnessed most of the buying from these baskets. BSE Midcap and Smallcap stocks also followed the same trend.

Among the Sensex pack 22 stocks ended in red territory and 8 in green territory. The market breadth indicating the overall health of the market remained positive as 1648 stocks closed in green while 1154 stocks closed in red and 78 stocks remained unchanged in BSE.

The BSE Sensex closed lower by 255.70 or (1.61%) points at 15,666.64 and NSE Nifty ended down by 70.25 points or (1.48%) at 4,662.10. BSE Mid Caps and Small Caps closed with gains of 19.27 and 35.27 points at 5,882.97 and 6,997.03 respectively. The BSE Sensex touched intraday high of 15,821.35 and intraday low of 15,589.80.

Losers from the BSE Sensex pack are Tata Steel (3.26%), Reliance (3.20%), Hincalco (3.11%), Sterlite Industries (2.97%), L&T Ltd (2.91%), Infosys Tech (2.53%), TCS Ltd (2.50%), Wipro Ltd (2.37%), ITC Ltd (2.34%), Bharti Airtel (2.32%), SBI (2.16%), Reliance Infra (1.95%), RCom (1.86%), ICICI Bank (1.85%) and JP Associates (1.50%).

Gainers from the BSE Sensex pack are M&M Ltd (4.15%), DLF Ltd (2.67%), NTPC Ltd (1.19%), Maruti Suzuki (1.03%), Grasim Industries (0.90%) and HDFC Bank (0.85%).

India’s economic growth accelerated for the first time since 2007. Gross domestic product expanded 6.1% in the first quarter ended June 30 2009 from 7.8% of the corresponding period of previous year. GDP growth was 5.8% during the previous quarter, according to the Central Statistical Organization.

Meanwhile, industry growth stood at 5% as against 6% of previous year and mining growth is at 7.9% as compared to 4.6% of last year. Going ahead, Farm sector growth stood at 2.4% against 3% of previous year and manufacturing growth stood at 3.4% as compared with 5.5% of last year. In addition, construction sector expanded at 7.1% as against 8.4% of corresponding period of preceding year and services sector grew 7.8% from 10.2% of previous year.

On the global markets front, the Asian markets that opened before the Indian market, ended lower. Shanghai Composite, Hang Seng, Nikkei 225, Singapore''s Straits Times Index and Seoul Composite closed lower by 192.94, 374.43, 41.61, 37.41 and 16.09 points at 2,667.75, 19,724.19, 10,492.53, 2,605.39 and 1,591.85 respectively.

European markets, which opened after the Indian market, are trading in red. In Frankfurt the DAX index is trading down by 40.25 points at 5,477.10 whereas London''s market was closed for a holiday.

The BSE IT index tumbled (2.26%) or 96.41 points at 4,172.52. Main losers are Infosys Tech (2.53%), TCS Ltd (2.50%), Finac Tech (2.41%), Wipro Ltd (2.37%) and HCL Tech (2.25%).

The BSE Metal index dropped by (2.18%) or 276.35 points at 12,382.92. Losers are Welspan Gujarat SR (4.50%), Tata Steel (3.26%), Hindalco (3.11%), Sterlite Industries (2.97%) and Jindal Steel (2.56%).

The BSE Teck index decreased by (2.10%) or 65.30 points at 3,046.83. Losers are Zee News (5.05%), Zee Ent (2.72%), Infosys Tech (2.53%), TCS Ltd (2.50%) and Finac Tech (2.41%).

The BSE Oil & Gas index closed lower by (1.71%) or 170.11 points at 9,774.73. Main losers are Reliance (3.20%), Reliance Pet (2.66%), Gail India (2.32%) and Essar Oil Ltd (1.29%).

The BSE Capital Goods index ended down by (1.35%) or 180.22 points at 1,151.15 as L&T Ltd (2.91%), SKF India (2.33%), Kalpat Power T (2.14%), Everest Kanto (1.84%) and Punj Lloyd (1.28%) ended in red.

The BSE Realty index gained (2.91%) or 124.65 points at 4,413.59. Gainers are Unitech Ltd (7.72%), Ackruti (5.97%), DLF Ltd (2.67%), Indiabull Real (1.09%) and Parsvnath (0.93%).

Sterlite Industries (India) Ltd slipped 2.97% after copper prices in Shanghai declined more than 2% with investors becoming cautious about the outlook for economic recovery.

Bilcare Ltd fell 1.50% after the company’s board approved raising up to $35 million via global depository receipts.

Tata Consultancy Services (TCS) dropped by 2.50%. The company announced that it had signed a contract with Saudi Arabia''s Chamber of Commerce of the Eastern Region for executing an Oracle ERP implementation project.

Subex Ltd decreased by 1.23%. The company released Rocware 2.0 for Communication Service Providers (CSPs) to assist them with revenue protection, cost management and assured operations.

Cairn India gained 2.02%. The company has started production from the world class Mangala Field in Rajasthan. Mangala is the largest of 25 discoveries made by Cairn in the Barmer Basin in Block R J-ON-90/1. The Mangala field was dedicated to the Nation by tho Hon''ble Prime Minister of India, Dr. Manmohan Singh, at the Mangala Processing Terminal, Barmer, Rajaathan.

Supreme Infrastructure India Ltd ended higher by 9.99%. The company has informed that the Company has awarded new work orders from Ramprashta Promoters & Developers (Pvt) Ltd for construction of Multistoried EDGE Towers Complex at Ramprastha City in Sector 37-D, Gurgaon, Haryana.