Post Session Commentary - Sep 17 2009

The market erased most of its initial gains to end the volatile session on the flat note as profit booking emerged during the trading. Shares of Reliance Industries contributed to drag the market lower as it closed with loss of more than 4%. Investors took calculative steps on fears of rise in interest rates that over looked the RBI’s statement that the central bank will not hike interest rates before economic recovery will come on track. Fears of rise in rates surfaced on account of increasing inflationary pressure. India’s inflation came in at 0.12% in week ended 5th September 2009, as against -0.12% in the previous week. Earlier during initial trading, market exhibited gains on positive global cues as Asian market ended in with good gains and European markets were in green. However rally was brief and selling pressure lugged the domestic bourses. The BSE Sensex ended around 6,700 level and NSE Nifty closed around 4,960 mark.

Market opened on upbeat note tracking firm cues from the global markets. The US markets closed with handsome gains on Wednesday, on strong economic data and firm cues from markets all over the world. Stocks rallied after industrial production increased 0.8% in August for second straight month, which is better than expected. In addition weakness in dollar boosted industrial and commodity stocks. Further, Indian benchmark managed to sustain the momentum till mid session and further pared most of the gains. Stocks continued to move between positive and negative terrain till end, on continuous bouts of buying and selling. From the Teck, IT, Auto, Bank and Consumer Durable stocks contributed to most of the buying. BSE Mid Caps and Small Caps stocks also remained on buyers’ radar. However, most of the selling was seen in Oil & Gas, Realty, PSU and Metal stocks.

Among the Sensex pack 22 stocks ended in green territory and 8 in red territory. The market breadth indicating the overall health of the market remained negative as 1574 stocks closed in red while 1223 stocks closed in green and 91 stocks remained unchanged in BSE.

The BSE Sensex closed marginally higher by 34.07 points at 16,711.11 and NSE Nifty ended slightly up by 7.15 points at 4,965.55. BSE Mid Caps and Small Caps closed with gains of 16.70 and 9.39 points at 6,143.62 and 7,317.50 respectively. The BSE Sensex touched intraday high of 16,820.02 and intraday low of 16,636.55.

Gainers from the BSE Sensex pack are ACC Ltd (3.65%), Hindalco (3.62%), JP Associates (3.28%), Bharti Airtel (3.13%), Maruti Suzuki (3.08%), Grasim Industries (2.89%), Wipro Ltd (2.02%), Infosys Tech (1.87%), TCS Ltd (1.69%), HDFC Bank (1.44%), HUL (1.26%), M&M Ltd (1.25%), RCom (0.99%), ONGC Ltd (0.99%), L&T Ltd (0.89%) and SBI (0.82%),

Losers from the BSE Sensex pack are Reliance (4.45%), Tata Steel (1.97%), ITC Ltd (1.02%), NTPC Ltd (0.71%), Herohonda Motors (0.65%) and Reliance Infra (0.42%).

The inflation finally pulled back into the positive territory for the first time since 30th May 2009. It remained in negative zone for 13 consecutive weeks. India’s inflation came in at 0.12% in week ended 5th September 2009, as against -0.12% in the previous week. Meanwhile, the rate was 12.42% in the corresponding week of previous year. The rate turned negative for the week ended 6th June 2009, for the first time since the new wholesale price index (WPI) series started in 1995. Inflation touched a high of 12.91% for the week ended 2nd August 2008 and touched a low of -1.74% on 1st August 2009.

On the global markets front, the Asian markets that opened before the Indian market, ended higher due to better economic data that raised hopes of strengthening of global economic recovery. Moreover, the Bank of Japan hold the key policy rate steady at 0.1% and moreover raised its assessment of the economy. Shanghai Composite, Hang Seng, Nikkei 225 and Seoul Composite closed up by 60.55, 365.59, 173.03 and 12.12 points at 3,060.26, 21,768.51, 10,443.80 and 1,695.47 respectively. However, Singapore''s Straits Times Index lost 1.82 points at 2,672.6 respectively.

European markets, which opened after the Indian market, are trading in green tracking Wall Street gains overnight.. In Paris the CAC 40 is higher by 18.86 points at 3,832.65, in Frankfurt DAX index is trading up by 33.16 points at 5,733.42 and in London FTSE 100 is trading higher 40.21 points at 5,164.34.

The BSE Teck index ended up by (1.92%) or 61.56 points 3,265.42. Gainers are Patni Computer (7.53%), HCL Teck (6.12%), Tata Teleservices (5.41%), Tanla (3.65%) and Bharti Airtel (3.13%).

The BSE IT index ended higher by (1.91%) or 85.40 points at 4,548.17 on strong US economic data. Gainers are Patni Computer (7.53%), HCL Teck (6.12%), Rolta India (2.89%), Wipro Ltd (2.02%) and Infosys Tech (1.87%).

The BSE Auto index gained (1.46%) or 93.36 points 6,467.21. Amtek Auto (14.58%), Cummins Indi (4.99%), Bharat Forge (4.35%), Maruti Suzuki (3.08%), and Exide Industries (2.97%) ended in green.

The BSE Oil & Gas index lost (2.86%) or 296.39 points at 10,079.36 after crude oil futures prices settled at their highest level this month overnight, as BPCL (4.99%), HPCL (4.98%), Reliance (4.45%), Reliance Pet (3.96%) and Gail India (0.69%) closed in negative terrain.

The BSE Realty index closed lower by (0.91%) or 40.74 points at 4,416.33. Losers are Unitech Ltd (3.04%), Pheonix Mill (2.39%), Pheonix Mill (2.39%), Indiabull Real (2.13%) and Penland Ltd (1.66%).

The BSE PSU index dropped by (0.35%) or 31.13 points at 8,756.75. Main losers are BPCL (4.99%), HPCL (4.98%), Power Finance (1.96%), J&K Bank (1.87%) and Bank Maha (1.70%).

Reliance Industries Ltd fell 4.45% after the company said that Petroleum Trust sold its 1.5 crore equity shares in the company.

Ranbaxy Laboratories Limited lost 1.17%. The company has entered into a strategic in-licensing agreement for the Indian market, with Medy-Tox Inc, (Medy-Tox), South Korea''s largest Botulinum -Toxin specialized Biotech Venture, for its cosmetic product, Neuronox.

ALSTOM ended up by 4.02%. The company and its consortium partners have signed a contract to supply the signalling system with the Bangalore Metro Rail Corporation Ltd for the first two lines of the new Bangalore metro system in India. Both lines will enter into revenue services in September 2012.

Great Offshore Ltd improved 0.30% after Bharati Shipyard hiked its stake in the offshore oil services firm to 22.5% by picking up additional 3.01% shares from the market.

TVS Motor Company Ltd dropped by 2.46% despite the Supreme Court yesterday allowed the company to sell its twin spark Flame motor bikes against a legal battle with larger rival Bajaj Auto.