Post Session Commentary - Sep 1 2009

Domestic market pared all its initial gains to close the day on downbeat note on sustained selling pressure witnessed in key stocks. Market turned southward and continued to extend losses tracking lower European markets along with weak US index futures that led selling pressure in the domestic bourses. However, market was firm during the early trading as the Asian stocks were higher on strong Chinese manufacturing sector data. The China’s Purchasing Managers’ Index increased to a seasonally adjusted 54 in August from 53.3 in July. Meanwhile, India’s exports dropped by 28.4% in July as against the same month last year. The BSE Sensex ended below 15,600 level and NSE Nifty closed below 4,650 mark.

The market today opened significantly higher along with other Asian markets. Moreover, the US stock markets closed lower on Monday due to sustained selling pressure led by Chinese market that plunged yesterday on worries about the impact of fragile bank lending on the economy. Further, Indian benchmark indices continued to trade in positive terrain till mid session on significant buying emerged across the board. However, market was unable to hold the momentum and gave up all gains in line with unfavorable European stocks. Profit booking at higher level forced market to extend last session’s weakness and close with losses. From the sectoral front, most of the selling was witnessed in Realty, Metal, Power, Capital Goods, Pharma and PSU stocks. BSE Midcap and Smallcap stocks also remained out of favour. However, Auto and IT stocks were unable to gain favour from the market.

Among the Sensex pack 23 stocks ended in red territory and 7 in green territory. The market breadth indicating the overall health of the market remained negative as 1658 stocks closed in red while 1151 stocks closed in green and 62 stocks remained unchanged in BSE.

The BSE Sensex closed lower by 115.45 points or (0.74%) at 15,551.19 and NSE Nifty ended down by 36.75 points or (0.79%)at 4,625.35. BSE Mid Caps and Small Caps closed with losses of 85.48 and 105.86 points at 5,797.49 and 6,891.17 respectively. The BSE Sensex touched intraday high of 15,923.09 and intraday low of 15,475.28.

Losers from the BSE Sensex pack are ACC Ltd (3.62%), Sterlite Industries (2.88%), HDFC (2.49%), BHEL (2.31%), JP Associates (2.25%), ONGC Ltd (1.98%), Hindalco (1.94%), Reliance Infra (1.93%), DLF Ltd (1.77%) and Tata Steel (1.61%).

Gainers from the BSE Sensex pack are Maruti Suzuki (7.61%), Tata Motors (5.82%), Herohonda Motors (1.55%), Wipro Ltd (1.50%), RCom (1.34%) and HUL (0.71%).

India''s exports dropped by 28.4% in July as against the same month last year. Export contracted for the tenth month in a row, as overseas shipments were hit by slowdown in major global markets like the US and Europe. Exports declined to $13.62 billion in July from $19.03 billion in the same month last year, according to the government data. Imports also reported fall for the seventh straight month by 37.1% to $19.62 billion in July from $31.18 billion over the year-ago month.

On the global markets front, the Asian markets that opened before the Indian market, ended in green. Asian stocks rebounded with rise in Chinese stocks on data showing that China''s manufacturing growth accelerated in August to its fastest rate this year. The Purchasing Managers’ Index rose to a seasonally adjusted 54 in August from 53.3 in July. Shanghai Composite, Hang Seng, Nikkei 22, Singapore''s Straits Times Index and Seoul Composite closed up by 15.98, 148.11, 37.53, 3.49 and 31.21 points at 2,686.72, 19,872.30, 10,530.06, 2,596.39 and 1,623.06 respectively.

European markets, which opened after the Indian market, are trading in red on recovery concerns. The unemployment rate in the euro zone increased to the highest level for more than a decade to 9.5% in July from 9.4% in June. Further, the U.K.''s manufacturing sector unexpectedly contracted in August, as companies shed jobs and new orders slowed. In Frankfurt the DAX index is trading lower by 88.30 points at 5,376.31 and in London FTSE 100 is trading down by 57.61 points at 4,851.29.

The BSE Realty index closed lower by (3.07%) or 135.56 points at 4,278.03. Losers are Penland Ltd (5.98%), Ansal Infra (5.77%), Mahindra Life (5.37%), Indiabull Real (5.36%) and Sobha Dev (5.18%).

The BSE Metal index ended down by (1.94%) or 240.76 points at 12,142.16 as Jai Corp Ltd (4.82%), Ispat Industries (4.47%), Gujarat NRE C (3.67%), Sterlite Industries (2.88%) and Jindal Saw (2.65%) ended in red.

The BSE Power index decreased by (1.66%) or 49.70 points at 2,942.24. Losers are Crompton Greaves (3.56%), GMR Infra (3.46%), Siemens Ltd (2.46%), BHEL (2.31%) and ABB Ltd (2.17%).

The BSE Capital Goods index dropped by (1.64%) or 215.53 points at 12,935.62. Losers are Punj Lloyd (4.02%), Crompton Greaves (3.56%), Elecon Eng C (3.32%), Bharat Bijli (2.86%) and BEML Ltd (2.72%).

The BSE Pharma index closed lower by (1.38%) or 53.86 points at 3,847.07. Main losers are Lupin Ltd (3.70%), Sterlite Biotec (3.07%), Orchid Chem (2.96%), Opto Circuit (2.93%) and Divi’s Lab (2.37%).

The BSE Auto index gained (2.45%) or 144.21 points at 6,022.44. Gainers are Maruti Suzuki (7.61%), Tata Motors (5.82%), Amtek Auto (5.52%), Bosch Ltd (1.71%) and Herohonda Motors (1.55%).

Kalpataru Power Transmission Ltd lost 0.55%. The company has recently secured orders worth Rs. 1400 Crores (approx) from Maharashtra State Electricity Transmission Co. Ltd (MSETCL) arid North East Transmission Co. Ltd (JV of PGCIL, ONGC, JLFS and NHR states) for transmission and substation projects.

Hindustan Construction Co Ltd ended down by 3.90%. The company has received a Letter of Intent from North Eastern Electric Power Corporation Ltd, under Pare Hydro Electric Project (110 MW), Arunachal Pradesh.

Nagarjuna Construction Company Limited decreased by 0.88%. The company has secured two new orders aggregating Rs. 481 crores.

Ranbaxy Lab lost 2.44%. Daiichi Sankyo Company limited and the company announced that Terapia S.A, ("Terapia Ranbaxy"), a subsidiary of Ranbaxy in Romania, will market the osteoporosis medication, Kvista in Romania. This is the first lime in Europe that Daiichi Sankyo and Ranbaxy are leveraging synergies generated through the Hybrid Business Model.

NHPC closed at Rs. 36.70, at a premium compared with the IPO price of Rs. 36 per share. A huge volume of 19.36 crore shares was recorded in the stock on BSE.

Maruti Suzuki India Limited advanced by 7.61%. India''s car market leader sold a total of 84,808 vehicles in August 2009, with growth of 41.6% in the month. This includes exports of 14,847 units, the highest ever-monthly export in the company''s history.