Post Session Commentary - Aug 6 2009

After the yesterday’s gains, the domestic market today plunged sharply to close in red terrain on intense profit booking. Depressing cues from the US markets weighed on the sentiments. Unsatisfactory readings on the US service sector along with employment situation and a cautious outlook from P&G contributed to the downward journey. Benchmark indices were under pressure also on concern of weak monsoon that is below normal. Meanwhile, India’s inflation remained in negative for the eighth straight week, with falling 1.58% for the week ended 25th July compared with 1.54% decline in the previous week. The BSE Sensex ended below 15,550 level and NSE Nifty closed below 4,500 mark.

Market opened on downbeat note tracking weak cues from global markets. The US stocks markets closed lower on Wednesday following some weaker-than-expected economic reports. The ISM services index for July unexpectedly slipped to 46.4 from 47 in June. Besides, the latest ADP employment report in US indicated that 3.71 lakh jobs were slashed in July. Further, benchmark indices continued to trade weak amid volatility on sustained selling over the counters. However, market managed to gain some ground during afternoon trade tracking gains in European stocks, before slipping again. Going ahead, stocks extended losses and nosedived during final trading backed by strong selling pressure. From the sectoral front, investors off-loaded positions across the sectors. Besides, most of the selling was witnessed in Auto, Realty, Metal, FMCG, Power, Consumer Durables, Capital Goods and IT stocks. BSE Midcap and Smallcap indices also remained under pressure.

Among the Sensex pack 28 stocks ended in red territory and 2 in green. The market breadth indicating the overall health of the market remained negative as 1614 stocks closed in red while 1080 stocks closed in green and 73 stocks remained unchanged in BSE.

The BSE Sensex closed lower by 389.80 points or (2.45%) at 15,514.03 and NSE Nifty ended down by 108.65 points or (2.31%) at 4,585.50. BSE Mid Caps and Small Caps closed with losses of 136.07 and 82.59 points at 5,559.26 and 6,314.79 respectively. The BSE Sensex touched intraday high of 15,969.81 and intraday low of 15,443.22.

Losers from the BSE Sensex pack are Tata Motors (6.93%), Hindalco (6.50%), JP Associates (5.53%), Maruti Suzuki (5.34%), Herohonda Motors (5.25%), ACC Ltd (4.94%), Sterlite Industries (4.79%), M&M Ltd (4.14%), ITC Ltd (4.02%), Tata Steel (3.87%), HUL (3.81%), Grasim Industries (3.55%), ONGC Ltd (3.32%), RCom (3.31%), Reliance Infra (3.01%), DLF Ltd (2.90%), SBI (2.57%), TCS Ltd (2.39%), HDFC (2.35%) and HDFC Bank (2.33%).

Gainers from the BSE Sensex pack are Sun Pharma (1.53%) and Wipro Ltd (0.04%).

India’s inflation remained in negative for the eighth straight week, with falling 1.58% for the week ended 25th July compared with 1.54% decline in the previous week. The annual inflation rate was 12.53% during the corresponding week of previous year. Wholesale price index for all commodities, used to measure the inflation, was up 0.04% on a week-on-week basis, at 236.9. The primary articles index was 0.4% high and the prices of manufacturing products dropped 0.1%. Meanwhile, inflation rate for the week ended 30 May 2009 was revised to a rise of 0.9% from a provisional 0.13% reported previously.

On the global markets front the Asian markets that opened before the Indian market, ended mostly up. Hang Seng, Nikkei 225 and Seoul Composite ended up by 404.47, 135.56 and 5.57 points at 20,899.24, 10,388.09 and 1,565.04 respectively. However, Shanghai Composite and Straits Times lost 72.17 and 5.33 points at 3,356.33 and 2,601.50 respectively.

European markets, which opened after the Indian market, are trading in green. In Frankfurt the DAX index is trading up by 29.28 points at 5,382.29 and in London FTSE 100 is trading up by 47.30 points at 4,694.43.

The BSE Auto index underperformed the benchmark indices as dropped by (4.43%) or 263.16 points at 5,676.95 on profit booking. Scrips that lost are Escorts Ltd (7.80%), Tata Motors (6.93%), Ashok Leyland (6.25%), Maruti Suzuki (5.34%) and Herohonda Motors (5.25%).

The BSE Realty index plunged (3.65%) or 144.08 points at 3,802.20. Losers are Indiabull Real (8.04%), Anant Raj (7.61%), Sobha Dev (3.61%), Housing Dev (3.48%) and Omaxe Ltd (3.43%).

The BSE FMCG index ended down by (3.29%) or 88.84 points at 2,613.45 on worries over progress of India''s annual monsoon. As United Brew (5.59%), ITC Ltd (4.02%), HUL (3.81%), Dabur India Ltd (3.65%) and Colgate Palm (3.39%) ended in red.

The BSE Metal index dropped by (3.05%) or 390.43 points at 12,405.06. Losers are Hindalco (6.50%), Ispat Industries (4.96%), Sterlite Industries (4.79%), Jindal Saw (3.93%) and Tata Steel (3.87%).

The BSE Power index lost (2.30%) or 68.73 points at 2,925.67. Main losers are Suzlon Energy (4.39%), Torrent Power (3.91%), Crompton Greaves (3.42%), Siemens Ltd (3.37%) and GMR Infra (3.17%).

The BSE Consumer Durables index closed lower by (2.13%) or 68.09 points at 3,136.08. Losers are Rajesh Export (5.09%), Blue Star L (3.71%), Titan Ind (1.17%), Gitanjali GE (1.08%) and Videocon Ind (0.93%).

Thermax Limited lost 0.48%. The company announced that it has received an order for a turnkey contract from a major cement producer in Egypt The order value is USD 20 million.

Tata Teleservices (Maharashtra) Limited dropped by 0.70%. The company announced the launch of TATA DOCOMO, the most awaited GSM brand, in Mumbai arid across Maharashtra.

Canara Bank lost 0.05%. Rate of interest on vehicle loans sanctioned on or after August 1 have been revised by the Bank starting at 8.50% for the first 12 months, 9.50% during the next 24 months and 10% for periods above 36 months to 60 months.

Sterlite Industries (India) Ltd slipped 4.79% as copper prices declined on renewed concerns of global economic health as well as profit-taking.

Tata Consultancy Services (TCS) decreased by 2.39%. The company announced that it has simultaneously implemented an automated trading system for Dalwa Securities SMBC (Dalwa) across multiple markets in the Asia Pacific (APAC) region Including Tokyo, Hong Kong and Singapore.

Tata Communications increased by 0.92%. The company has bagged a licence for offering international long distance services in Russia and intends to offer full range of services including voice and data. The company already has an office established in Moscow. Tata Communications now has direct presence in about 40 countries.

Allied Digital Services Ltd rose 0.09% on reports it is evaluating acquisition deals in Europe and Australia worth $100 million by the next quarter.