Post Session Commentary - Oct 27 2009

The Indian markets closed on a down beat note on the anticipation of tightening of monetary policy by Reserve bank of India (RBI). The RBI, which injected huge amount of money in the recent past in order to give a boost to the economy, kept its key policy rates unchanged. The RBI kept the repo rate, reverse repo rate and CRR unchanged at 4.75%, 3.25% and 5% respectively. While it increased the SLR to 25% from 24%. Moreover, it hikes the inflation target to 6.5% from 5%. While it kept the FY10 GDP target unchanged at 6% with upward and the HTM bond ratio at 25%. It also said that there is need to downsize the Govt borrowing programme. However, it aims to contain inflation 4-4.5%. It also said the aggregate deposits to grow 18%. RBI, ended a special repurchase facility for banks and another for the funding needs of non-bank financial companies, mutual funds and housing finance companies effective immediately. It also ended a forex swap facility for banks as well as cut an export credit refinance facility to a pre-crisis level of 15% from 50% with immediate effect.

From the sectoral front, the banking stocks fell as the Country’s Central bank did not announce any hike in the ceiling on the portion of government securities, which the banks can park in held to maturity segment. Moreover, the realty stocks also took a sharp beat as the RBI increased the provisioning for commercial real estate loans to 1 percent from 0.4 percent for standard assets. The telecom stocks fell after Idea Cellular''s Managing Director Sanjeev Aga, said the price war in the teleocom sector which he described as a ''bloodbath'' would cut local call charges, currently at 40 paise a minute, to ''unsustainable'' levels.

After the dismal opening tracking the weakness in the global markets, the domestic markets drifts down further after the announcement of the quarterly monetary policy review by the Reserve Bank of India. The BSE Sensex closed below the 16,400 mark while Nifty just below 4,850 mark. From the sectoral front, Realty (down 6.24%), Metal (5.82%), Bankex (3.82%) and Consumer Durables (3.26%) indices faced the blood bath to close with huge losses.

Among the Sensex pack 23 stocks ended in negative territory and 7 stocks in positive territory. The market breadth indicating the overall health of the market remained weak as 2,281 stocks closed in red while 442 stocks closed in green and 67 stocks remained unchanged in BSE.

The BSE Sensex closed lower by 387.10 points or (2.31%) at 16,353.40 and NSE Nifty closed down by 124.20 points or (2.50%) at 4,846.70. BSE Mid Caps and BSE Small Caps closed with losses of 236.24 points and 334.80 points at 6,157.48 and 7,238.22 respectively. The BSE Sensex touched intraday high of 16,699.09 and intraday low of 16,311.50.

Losers from the BSE Sensex pack are Hindalco Inds (7.92%), Tata Steel (7.26%), Bharti Airtel (7.08%), Reliance Comm (6.61%), DLF (6.58%), ICICI Bank (6.11%), Sterlite Inds (5.46%) and SBI (4.45%).

Gainers from the BSE Sensex pack are Wipro (2.18%), Tata Motors (1.56%), HUL (0.86%), Grasim Inds (0.78%) and Sun Pharma (0.35%).

On the global markets front, the Asian markets that opened before the Indian market, closed in red. Shanghai Composite, Hang Seng, Jakarta Composite, Nikkei Strait Times ended lower by 2.83%, 1.86%, 1.72%, 1.45% and 0.81% at 3,021.45, 22,169.59, 2,425.20, 10,212.46 and 2,694.50 respectively.

European markets, which opened after the Indian market, are trading higher. In Paris the CAC 40 is up by 0.62% at 3,767.71, in Frankfurt DAX index is trading up by 0.46% at 5,668.11 and in London FTSE 100 is higher by 0.53% at 5,219.12.

BSE REALTY indexwas at 4,046.04 down by 269.35 points or by (6.24%) The main losers were Omaxe Ltd down by (9.67%) at Rs.106.55, Housing Dev down by (8.65%) at Rs.340.45, Ansal Infras down by (8.42%) at Rs.69.1, Unitech Ltd down by (7.65%) at Rs.85.65, Parsvnath down by (7.22%) at Rs.114.3,

BSE METAL index was at 14,356.37 down by 886.8 points or by (5.82%) The main losers were Sesa Goa Ltd down by (12.44%) at Rs.276.35, Ispat Indust down by (7.93%) at Rs.20.9, Hindalco In down by (7.92%) at Rs.126.15, Tata Stl down by (7.26%) at Rs.501.3, Jindal Saw down by (6.76%) at Rs.729.1,

BSE BANKEX index was at 9,679.08 down by 384.94 points or by (3.82%) The main losers were Indian Overs down by (8.31%) at Rs.118, Idbi Bank L down by (7.72%) at Rs.121.95, Indus Ind Bk down by (7.1%) at Rs.123.65, Oriental Bk down by (6.8%) at Rs.245.45, Canara Bank down by (6.47%) at Rs.339.5.

BSE FMCG index was at 2,813.06 down by 36.8 points or by (1.29%) The main losers were United Brew down by (6.47%) at Rs.138, Ruchi Soya down by (4.99%) at Rs.84.75, Unitd Spr down by (4.67%) at Rs.999.25, Britania In down by (3.89%) at Rs.1672.75, Colgate Palm down by (3.43%) at Rs.698.85,

BSE AUTO index was at 6,351.65 down by 99.7 points or by (1.55%) The main losers were Escorts Ltd. down by (7.81%) at Rs.105.6, Amtek Auto L down by (6.27%) at Rs.177.95, Apollo Tyre.* down by (4.72%) at Rs.50.45, Mrf Ltd down by (4.13%) at Rs.5519.35, Bharat Forge down by (3.32%) at Rs.256.1,

BSE CD index was at 3,436.60 down by 115.68 points or by (3.26%) The main losers were Gitanjali Ge* down by (5.81%) at Rs.115.1, Blue Star L down by (5.36%) at Rs.342.85, Rajesh Expot down by (3.06%) at Rs.74.55, Titan Ind. down by (2.75%) at Rs.1260.9, Videocon Ind down by (1.33%) at Rs.241.4,

BSE IT index was at 4,504.00 down by 47.63 points or by (1.05%) The main losers were Aptech Ltd down by (17.08%) at Rs.211.65, Niit Ltd down by (9.14%) at Rs.62.1, Moser Baer down by (7.64%) at Rs.80.4, Rolta Ind down by (6.95%) at Rs.174.8, Financ Techn down by (3.39%) at Rs.1189.2.