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Thursday, November 05, 2009

Post Session Commentary - Nov 5 2009


The Indian stock market made a sharp turnaround to recover from the day’s low to close with decent gains on heavy buying across the sectoral indices in the final hours. Though the cues from the Asian markets and European markets are not supportive, the market staged smart recovery due to some favoring cues from the domestic arena. The government said that the income tax receipts during April-October 2009 surged 2.9% to Rs. 63,195 crore while the corporate tax receipts during the period grew by 4.6% to Rs. 1,10,000 crore and the direct tax receipts shot up by 3.9% to Rs. 1,73,000 crore. Besides this, the Union Cabinet gave the approval of listing the state run firms on the stock exchanges, which have a track record of profits in the past three years. Moreover, the government decided that the proceeds from the equity divestment in State run firms can be utilized for capital expenditure on social sector programmes instead of routing it through the National Investment fund. Moreover, the government today announced that there will be no more weekly headline inflation data and it will release the monthly wholesale price index for October 2009 on November 12, 2009. Heavy buying across the sectoral indices led the BSE Sensex to bounce back from the negative territory to close above the 16,000 mark while Nifty just above 4,760 mark. From the sectoral front, the Metal index (up 2.93%), Realty index (up 2.58%) and Power index (up 2.56%) attracted the investors’ confidence as most buying was witnessed from this basket.

The market witnessed volatility during the trading session. After a gap down opening tracking the weakness in the Asian markets, the domestic market drifted downward further to touch fresh intraday low but later recover on sustained buying support but did not able to sustain at that level and tumbled a bit but heavy buying in the final hours led the market to close on a good note. From the global markets, the US market on a mixed note. The US Federal Reserve kept its benchmark Federal Funds Rate unchanged and repeated that it will keep interest rates near zero for “an extended period”. Moreover, it specified that the policy will stay unchanged as long as expectations of inflation are stable and the unemployment fails to decline. Ben Bernanke, Chairman of US Federal Reserve said that household spending appears to be expanding, but remains constrained by ongoing job losses as well as sluggish income growth, lower housing wealth and tight credit.

The Finance Minister, Pranab Mukherjee yesterday said that the government does not plan to withdraw the stimulus, which it had announced earlier in order to revive the economy or impose curbs on the rising capital inflows. Also the rising of inflation that rose to 1.51 for the week ended October 17, 2009 does not seems to be a concern for the Finance Minster.

Moreover, Montek Singh Ahluwalia, Planning Commission Deputy Chairman, said that the government would push for reforms in the financial sector and also said that the country would miss a target of 9% annual growth between 2007-08 and 2011-12 as the output was being hit due to global slump and weakest monsoon in four decades. The planning commission said in a report that the economy is expected to expand by 6.3% in the year to March 2010.

Among the Sensex pack 23 stocks ended in positive territory and 7 stocks in negative territory. The market breadth indicating the overall health of the market remained strong as 1,827 stocks closed in green while 841 stocks closed in red and 77 stocks remained unchanged in BSE.

The BSE Sensex closed higher by 151.77 points or (0.95%) at 16,063.90 and NSE Nifty closed up by 54.75 points or (1.16%) at 4,765.55. The BSE Mid Caps closed higher by 121.04 points at 6,115.44 and the BSE Small Caps closed up by 125.32 points at 7,013.85. The BSE Sensex touched intraday high of 16,092.38 and intraday low of 15,564.89.

Losers from the BSE Sensex pack are SBI (1.14%), ITC (0.90%), ACC (0.78%), Infosys (0.74%), TCS (0.31%) and L&T (0.29%).

Gainers from the BSE Sensex pack are Reliance Infra (5.59%), Reliance Comm (5.34%), Hindalco (5.08%), Bharti Airtel (4.50%), M&M (3.56%), Tata Steel (3.28%), Bhel (2.47%), Hero Honda (2.31%) and JP Associates (2.26%).

On the global markets front, the Asian markets that opened before the Indian market, closed in negative. Seoul Composite, Strait Times, Taiwan Weighted and Hang Seng closed lower by 1.75%, 0.73%, 0.66% and 0.63% at 1,552.24, 2,629.35, 7,417.46 and 21,479.08 respectively.

European markets, which opened after the Indian market, are trading in red. In Paris the CAC 40 is lower by 0.20% at 3,662.86, in Frankfurt DAX index is trading down by 0.13% at 5,436.91 and in London FTSE 100 is lower by 0.42% at 5,086.54.

BSE REALTY indexwas at 3,884.50 up by 97.68 points or by (2.58%) The main gainers were Housing Dev up by (6.42%) at Rs.341.6, Phoenix Mill up by (6.09%) at Rs.162.9, Orbitco up by (5%) at Rs.254.2, Mahindralife up by (3.62%) at Rs.335, Unitech Ltd up by (3.59%) at Rs.85.15.

BSE METAL index was at 14,218.25 up by 404.93 points or by (2.93%) The main gainers were Jsw Sl up by (7.34%) at Rs.774, Gujara Nre C up by (6.43%) at Rs.58.8, Jindal Saw up by (5.22%) at Rs.729.25, Hindalco In up by (5.08%) at Rs.125.2, Nmdc Ltd up by (4.64%) at Rs.307.65,

BSE BANKEX index was at 9,523.84 up by 85.93 points or by (0.91%) The main gainers were Yes Bank up by (5.53%) at Rs.239.5, Idbi Bank L up by (4.98%) at Rs.117.1, Karnataka Bk up by (4.85%) at Rs.132, Oriental Bk up by (4.68%) at Rs.257.25, Allahabad Bk up by (4.63%) at Rs.123.1.

BSE CG index was at 12,769.35 up by 177.97 points or by (1.41%) The main gainers were Suzlonenergy up by (13.33%) at Rs.62.5, Bharat Elect up by (6.15%) at Rs.1618.25, Punj Lloyd up by (5.78%) at Rs.207.6, Everest Kant up by (4.73%) at Rs.143.9, Abb Ltd up by (4.67%) at Rs.759.05.
BSE POWER index was at 2,932.59 up by 73.11 points or by (2.56%) The main gainers were Suzlonenergy up by (13.33%) at Rs.62.5, Lanco Infra up by (6.93%) at Rs.519.9, Tornt Power up by (5.72%) at Rs.312.15, Rel Infra up by (5.59%) at Rs.1089.3, Abb Ltd up by (4.67%) at Rs.759.05.

BSE IT index was at 4,440.90 down by 3.14 points or by (0.07%) The main losers were Infosys Technologies Ltd.-Ordi down by (0.74%) at Rs.2223.1, Tcs Ltd down by (0.31%) at Rs.623.9.

Wipro Limited closed up by 0.42% at Rs. 598.30. The company has signed an agreement to acquire the Yardley business in Asia, Middle East, Australasia and certain African markets for consideration of approx. $45.5 million, from UK-based Lornamead Group. This transaction adds another jewel to Wipro Consumer Care and Lighting (FMCG arm of Wipro Limited) following its acquisition of Unza in 2007.

Maytas Infra Limited surged 4.99% to close at Rs. 149.45. The company has bagged the Purie-Sholapur road contract worth Rs. 7900 million from IL&FS Transportation Networks Limited