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Monday, May 18, 2009
Post Session Commentary - May 18 2009
Market trading was halted for the day after benchmark indices triggers final upper limit of 20%. At around 11.55 am, the BSE Sensex touched the highest mark of 14,272.63 with rise of 17.24% and NSE Nifty touched the uppermost level of 4,384.30, which was 19.41% up from previous closing. The rally was backed by the surprised win for the UPA government (lead by 262 seats) in the 15th Lok Sabha election, which brought great cheers for the investors. Market is hopeful as less number of allies will direct to a stable government which will run its track of five years. SEBI, today vide their circular No. SMD/RPD/Policy/Cir-37 dated June 28, 2001 has stipulated that the index based market wide circuit breaker system shall apply at three stages of the index movement either way at 10%, 15% and 20%. Since the indices breached 20% level, there will be no further trading today.
The domestic market opened with a sharp gap and suddenly locked in at upper circuit. Trading had been halted for an hour. The market reopened at 10.55am. The sharp upward rally on Monday was in reaction to UPA’s stunned win at the general elections. The benchmark indices touched the psychological mark of 15% after one hour of halt and trading stopped once again till 11:55am as NSE Nifty hit 15% upper circuit the second 5% filter. Further, market resumed trading at 11:55am (IST) before finally halting the trading as crossed the final upper limit of 20%. On the sectoral front, all indiced ended with huge gains. Among those, most of the buying was seen in Realty, Capital Goods, Bank, Oil & Gas, Power, Metal, PSU and Teck stocks.
Among the Sensex pack all 30 stocks ended in green territory. The market breadth indicating the overall health of the market remained extremely positive as 833 stocks closed in green while 11 stocks closed in red and 2 stocks remained unchanged in BSE.
The BSE Sensex was up by 2,099.21 points at 14,272.65 and NSE Nifty was higher by 636.40 points at 4,308.05. The BSE Mid Cap increased by 276.06 points or 7.25% to 4,083.13 and the BSE Small Cap grew by 218.33 points or 5.10% to 4,497.93.
Gainers from the BSE Sensex pack are BHEL (32.72%), L&T Ltd (29.53%), DLF Ltd (25.82%), ICICI Bank (25.30%), HDFC (23.46%), Reliance (22.87%), RCom (22.74%), Bharti Airtel (22.53%%), Reliance Infra (22.02%), JP Associates (20.91%), SBI (20.76%), Tata Steel (17.60%), Sterlite Industries (16.53%), HDFC Bank (16.48%), Tata Motors (16.05%), Grasim Industries (14.26%), Wipro Ltd (13.83%), Hindalco (13.64%), Tata Power (13.38%) and ONGC Ltd (13.17%).
On the global markets front the Asian markets which opened before the Indian market, are trading mixed. Shanghai Composite, Hang Seng and Straits Times index are trading up by 7.52, 181.27 and 33.56 points at 2,652.78, 16,971.97 and 2,173.34 respectively. However, Nikkei 225 and Seoul Composite trading lower by 226.33 and 5.05 points at 9,038.69 and 1,386.38 respectively.
The BSE Realty index gained (25.37%) or 610.11 points to close at 3,014.98. Gainers are Indiabull Real (38.51%), Unitech Ltd (29.41%), DLF Ltd (25.81%), Housing Development (23.39%), Orbit Co (19.99%) and Parsvnath (19.94%).
The BSE Capital Goods stocks increased by (23.47%) or 2,036.30 points to close at 10,712.65. Major gainers are BHEL (32.72%), L&T Ltd (29.53%), Punj Lloyd (23.20%), Punj Lloyd (22.56%), Areva (20.99%) and Jyoti Struct (19.99%).
The BSE Bank index gained (20.27%) or 1,292.27 points at 7,667.92 hopes falling interest rates will boost lending growth. Scrips that gained are ICICI Bank (25.30%), Bank of Baroda (21.24%), Indian Overseas Bank (21.21%), SBI (20.76%), Yes Bank (20.48%) and Allahabad Bank (17.25%).
The BSE Oil & Gas stocks increased by (19.57%) or 1,665.38 points to close at 10,175. Major gainers are Reliance (22.87%), Aban Offshore (21.20%), Reliance Pet (20.23%), RNRL (19.48%), Essar Oil Ltd (15.46%) and Crompton Greaves (14.78%).
The BSE Power was up by (17.09%) or 378.90 points at 2,595.43. Gainers are BHEL (32.72%), GVK Power (27.89%), Suzlon Energy (22.56%), Reliance Infra (22.02%), GMR Infra (21.08%) and Reliance Power (17.49%).
The BSE Metal index advanced by (16.64%) or 1,310.03 points to close at 9,182.73. Main gainers are NMDC Ltd (19.99%), Steel Authority (19.38%), Ispat Indus (18.55%), Jindal Steel (18.51%), Sesa Goa Ltd (18.37%), Gujarat NRE C (18.35%) and JSW Steel (14.78%).
Tata Steel surged 17.60%. The company has taken major initiatives in retail including doubling of its outlets to 1,000 in the next 2-3 years for its branded products. This is in order to promote the sale of its steel products in the country.
MARKET makes a history
The Sensex at the opening bell (9.55am) was 1,306 points up at 13479 and Nifty was 532 points at 4203 and hit the first circuit for the day and also for the first time in the history of the Indian stock exchanges and the markets were closed for two hours. At 11.55am when the market opened again, the Sensex gained another 700 points and Nifty 150 points and hit the second circuit of the day and the market was closed for the day. For the day, the Sensex gained 2,111 points or 17.34% and closed at 14284 while Nifty gained 636 points to wrap the session at 4308.
The market breadth, the number of advancing shares to declining shares, was highly tilted in favour of advancing shares. Of the 846 stocks traded on the BSE, 833 stocks advanced, whereas 11 stocks declined. Two stocks ended unchanged. Of the 13 sectoral indices on the BSE, all closed positive gaining in the range of around 7-23%. BSE Realty moving up by 23.45% topped the list, while BSE CG (capital goods’ index), occupying the second slot, was up by around 21.90%. BSE Bankex (up 19.18%), BSE Oil & Gas (up 19.11%), BSE Power (up 18.33%), BSE PSU (up 16.42%), BSE Metal (up 16.10%) and BSE Teck (up 14.02%) posted significant gains for the day. Remaining indices were up 7-13% each.
Realty stocks were in limelight and closed with strong gains. Indiabulls Real Estate vaulted 38.51% at Rs205, Unitech soared 29.41% at Rs66, Housing Development and Infrastructure Ltd surged 26.08% at Rs229.90 and Orbit Corporation advanced 20% at Rs87.05.
Gateway Distipark attracted volumes of over 10 lakh shares on the BSE followed by Cals Refineries (6 lakh shares), K Sera Sera Productions (5 lakh shares) and IFCI (5 lakh shares).
Sensex vaults 17% as market cheers UPA's thumping victory in election; trading halted for the day
A clear mandate for the Congress-led United Progressive Alliance (UPA) in Lok Sabha election send stocks surging with trading on the bourses halted for the day at about 11:55 IST. For the first time in the history of the stock markets trading was halted because the market-wide circuit were applied due to a solid surge. Earlier, there have been instances when trading was halted when market-wide circuit filters were applied due to a market crash.
The 30-share Sensex jumped 2110.79 points or 17.34% at 14,284.21 and the 50-unit S&P CNX Nifty gained 651.50 points or 17.74% to 4,323.15.
BSE clocked a paltry turnover of Rs 77 crore. The combined turnover in the cash and the derivatives segment of BSE and NSE totaled Rs 3103. Only 846 stocks were traded on the BSE while 202 stocks witnessed action on the NSE.
Trading was halted in just 16 seconds after the market re-opened at 11:55 IST. Earlier in the day, trading was halted within seconds of opening as the market soared following a clear mandate for the UPA in the Lok Sabha election. A clear mandate for the Congress-led United Progressive Alliance (UPA) boosted hopes a strong coalition would be able to push through economic reforms that would boost foreign investment. The 30-share Sensex surged 14.70% or 1,789.88 points to 13,963.30 and the 50-unit S&P CNX Nifty gained 531.65 points or 14.48% to 4203.30, when trading was halted within seconds of opening.
While the solid surge on the bourses in opening trade was not a big surprise, what created confusion among the market was the level at which the circuit filters were applied. The market-wide circuit filters are applied taking into consideration the Sensex or Nifty's closing level on the last trading day of the previous quarter - this time based on the closing of Nifty or Sensex on 31 March 2009. If that be so, the market wide circuit filters should have applied at a gain of 975 for Sensex or a gain of 300 of Nifty whichever was achieved earlier
The index-based market-wide circuit breaker system applies at 3 stages of the index movement, either way viz. at 10%, 15% and 20%. These circuit breakers when triggered, bring about a coordinated trading halt in all equity and equity derivative markets nationwide. The market-wide circuit breakers are triggered by movement of either the BSE Sensex or the NSE S&P CNX Nifty, whichever is breached earlier.
In a circular issued after market hours, the National Stock Exchange (NSE) said the existing policy will continue to govern trading on the exchanges. Accordingly, the first level of the circuit breaker at 10% will be triggered at 300 points for Nifty and 975 for Sensex over the respective closing level of the indices today, 18 May 2009, it said. The second circuit breaker at 15% and the third circuit breaker at 20%, will be triggered at 450 points and 600 points for the Nifty respectively and 1450 points and 1950 points for the Sensex respectively, over the closing levels of today, it said.
For the record, the BSE Sensex today attained its highest closing since 11 September 2008 and the S&P CNX Nifty attained its highest closing since 10 September 2008.
As per the provisional data released by the stock exchanges after trading hours, foreign funds today bought shares worth a net Rs 44.64 crore. Domestic institutional investors sold shares worth a net Rs 8.41 crore.
The market breadth, indicating the overall health of the market, was strong. On BSE, 833 shares rose as compared with 11 that fell. A total of 2 shares remained unchanged.
The BSE Mid-Cap index rose 12.06% and the BSE Small-Cap index rose 9.09%. However, both these indices underperformed the Sensex.
The BSE Realty index (up 25.37%), the BSE Capital Goods index (up 23.47%), the BSE Bankex (up 20.27%), the BSE Oil & Gas index (up 19.57%) outperformed the Sensex.
The BSE FMCG index (up 6.78%), the BSE Healthcare index (up 8.04%), the BSE IT index (up 11.41%), the BSE Auto index (up 12.12%), the BSE Consumer Durables index (up 13.63%), the BSE TECk index (up 14.95%), the BSE PSU index (up 15.76%), the BSE Metal index (up 16.64%), the BSE Power index (up 17.09%), underperfomed the Sensex.
The market soared today, 18 May 2009, following a thumping victory of the Congress-led United Progressive Alliance (UPA) government in the Lok Sabha elections. A clear mandate for the UPA boosted hopes a strong coalition would be able to push through economic reforms that would boost foreign investment
The Sensex has risen 4636.90 points or 48.06% in calendar year 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the has Sensex has surged 6,123.81 points or 75.04%.
Coming back to today's trade, Bharat Heavy Electricals, Reliance Industries, HDFC, Reliance Infrastructure, ICICI Bank, Bharti Airtel, Larsen & Toubro, DLF, Reliance Communications, Jaipraksh Associates, State Bank of India, rose by between 20.76% to 32.72%.
Infrastructure shares jumped on hopes the Congress-led UPA government may boost spending on infrastructure sector after emerging victorious in the general elections. India's biggest engineering & construction firm by revenue L&T rose nearly 30% to Rs 1280. India's biggest power equipment maker by revenue Bharat Heavy Electricals rose 32.7% to Rs 2266.
Among other infrastructure stocks, Jaiprakash Associates, Gammon India, GVK Power & Infrastructure, GMR Infrastructure, and IVRCL Infrastructures & Projects rose 20% to 38.3%
Punj Lloyd surged 23.2% ahead of the Q4 March 2009, ahead of the announcement its Q4 March 2009 results later today, 18 May 2009.
Shares of power and capital goods companies surged following a thumping victory of the Congress-led United Progressive Alliance (UPA) government in the Lok Sabha elections, clearing the way for the landmark civilian nuclear deal with the US. Areva T&D jumped 21%, Reliance Infrastructure rose 22%, Hindustan Construction Company rose 25%, Crompton Greaves rose 13.8%, Tata Power Company rose 13%, Rolta gained 13%, ABB rose 13.9%, NTPC gained 11.9%, and Walchandnagar Industries rose 10%
State-run companies advanced on hopes of recommencement of the PSU disinvestment programme after the Congress-led UPA government got a clear mandate in the Lok Sabha election. Dredging Corporation of India rose 20%, Engineers India advanced 19.3%, HMT rose 20%, Neyveli Lignite Corporation advanced 17%, Shipping Corporation of India rose 10%, Hindustan Copper rose 10%, MMTC rose 20%, NMDC rose 20%, Power Finance Corporation rose 13.3% and Central Bank of India rose 18%
It may be recalled that the BJP-led National Democratic Alliance (NDA) had vigorously pursued PSU divestment. However, it was put in deep freeze in the last five years by the Congress-led United Progressive Alliance (UPA) government as the Left parties which supported the UPA government from outside, were bitterly opposed to the idea.
Consequently, in the past five years, the government raised just Rs 8,500 crore from disinvestment as against Rs 28,000 crore raised by the BJP-led government in the preceding five-year period.
The UPA government's thumping victory in the 15th Lok Sabha elections without the support of the Left parties has raised expectations that the government may revive disinvestment programme. The Congress party had in its manifesto released before polls promised to go ahead with disinvestment while retaining a majority holding in the state-run companies.
India's largest bank in terms of assets and branch network State Bank of India soared 20.76% on hopes the Congress-led UPA government may go ahead on a plan to merge six associate banks with State Bank of India to create a Indian banking behemoth.
The process of creating a Indian banking behemoth was set in motion two years ago, but got derailed due to resistance from the Left parties. Although the board of SBI and its associate bank, the State Bank of Saurashtra, had approved the merger in August 2007, the government approved it only in August 2008 after the Left withdrew its support to the government.
A merger of the associate banks with itself will give SBI the full benefit of size. SBI and its associate banks enjoy a fourth of the market share.
The SBI management may well be keen to merge the six associates at the earliest, but that will hinge on government approval since the government controls 59.41% of the equity in the bank.
India's largest motorbike maker by sales Hero Honda Motors soared 15.83% as index focused mutual funds took position in the stock ahead of its entry in the coveted BSE 30-share Sensex with effect from 29 June 2009. After trading hours on Friday, 15 May 2009, the BSE announced that Hero Honda will replace Ranbaxy Laboratories in the barometer index BSE Sensex with effect from 29 June 2009
prime minister Manmohan Singh's coalition defied predictions of a tight election and was only about 11 seats short of an majority from the 543 seats at stake, according to election commission data. Congress' alliance took 261 seats, sweeping aside its nearest rival, the bloc led by the Hindu-nationalist Bharatiya Janata Party (BJP), which won only 159 combined. Congress, which alone won 205 seats, needs a handful of partners to reach the 272 seats needed to take power, and is expected to seek the support of more smaller parties or independents. Congress leaders will meet on Tuesday to officially endorse Manmohan Singh as prime minister, after which the party will meet its coalition partners to decide potential new allies.
Armed with a popular mandate, the Congress led UPA government is going to stake claim today to run India for another five years. The Congress and its allies will go to meet President Pratibha Patil today to show that they have the numbers. The first meeting of the newly-constituted Congress Parliamentary Party (CPP) is expected to convened in a day or two to elect its leader. Singh, who is already the Prime Ministerial candidate of the Congress, is also likely to be elected by the MPs at a joint meeting of the UPA parties. The Congress must form a government by 2 June 2009.
Financial sector reforms are likely to get a push in the coming days, which were relegated to the back seat due to persistent opposition from the Left parties, with the Congress-led UPA set to form the next government. Left-less victory of the UPA over BJP-led National Democratic Alliance (NDA) would not only signify the formation of a stable government, but also revive hopes of a slew of pro-market policy changes.
Pre Session Commentary - May 18 2009
Today domestic markets are likely to open with huge gap up. The 14th Lok Sabha election results have once again bestowed Congress party with a responsibility of leading the nation for another five years. The 262 seats of Congress and its alliance UPA, has exuded the nation’s belief in the Manmohan Singh’s government. There will be a lot of movement in the Banking and Infrastructure stocks as the government is expected to allocate good amount of money in these sectors in the coming budget. Foreign funds will most likely pour a lot of money in anticipation of a stable government. Hence rupee would gain strength through a major break through of FIIs. The day will witness huge buying sentiments across the broader level.
On Friday, the domestic markets closed in green. Phenomenal opening of the Asian markets along with positive closing of the US markets brought a good feel factor for domestic investors and therefore benchmark indices spurred at opening bell. The bounce back was less anticipated ahead of the Lok Sabha election results to be announced on 16th May 2009. However investors surprised the markets by showing huge buying interest responding positive cues from other markets. Bankex, CG, CD and Teck closed with gains of 3.86%, 3.57%, 3.18% and 3.05% respectively. However FMCG was the only sector to close with a loss of 0.24%. Mid and Small cap stocks also managed to close with moderate gains of 3.86% and 0.57% respectively. We expect the markets to be trading positive.
The BSE Sensex closed high by 300.51 points at 12,173.42 and NSE Nifty ended with gain of 78.20 points at 3,671.65. BSE Mid Caps and Small Caps closed with gains of 50.14 points and 35.45 points at 3,807.07 and 4,279.60 respectively. The BSE Sensex touched intraday high of 12,219.54 and intraday low of 11,948.70.
On Friday, the US stock markets closed negative. For the fourth session in the week the markets closed in red. The session was choppy in the early trade which further instigated selling pressure across broader level. On the macro economic level the consumer price index for the month of April met expectations. However the industrial production fell by 0.5%. The life insurance companies will get an access to $22 billion in TARP funds. This news also raised apprehensions about low grading of these companies and therefore the life and health insurers closed with a loss of 3.5%. The US light crude oil futures for June closed lower by 3.6% at $56.52 per barrel on the New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) fell by 62.68 points to close at 8,268.64 The NASDAQ Composite (RIXF) index declined by 9.07 points to close at 1,680.14 and the S&P 500 (SPX) closed low by 10.19 points at 882.88.
Today major stock markets in Asia are trading in red. Hang Seng is trading low by 246.18 points at 16,544.52 followed by Shanghai Composite which is low by 33.22 points at 2,612.04. Japan''s Nikkei is also low by 238.22 points at 9,026.80, Strait Times is low by 15.54 points at 2,124.24. Seoul Composite fell by 18.58 points at 1,373.15 respectively.
Indian ADRs ended up. In technology sector, Infosys ended up by 1.72% along with Wipro by 2.99%. Further, Satyam gained 0.56% and Patni Computers ended higher by 5.48%. In banking sector ICICI Bank advanced by 4.93% and HDFC Bank went up by 2.72%. In telecommunication sector Tata Communication decreased by 2.20% and MTNL lost 2.36%. Sterlite Industries increased by 0.88%.
The FIIs on Friday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 1,523.40 Crore and gross debt purchased stood at Rs 255.70 Crore, while the gross equity sold stood at Rs 1,869.10 Crore and gross debt sold stood at Rs. 673.20 Crore. Therefore, the net investment of equity and debt reported were Rs (345.70) Crore and Rs (417.40) Crore respectively.
On Friday, the partially convertible rupee ended at 49.41/42 per dollar, 0.7 percent stronger than previous close at 49.78/79. Rupee gained strength due to phenomenal rise in local stock markets.
On BSE, total number of shares traded were 40.65 Crore and total turnover stood at Rs 5,113.70 Crore. On NSE, total number of shares traded was 83.68 Crore and total turnover was Rs 14,820.51 Crore.
Top traded volumes on NSE Nifty – Unitech with 55560935 shares, Cairn India with 32770419 shares, Suzlon Energy with 32303136 shares, DLF 24067427 shares followed by ICICI Bank with 13335097 shares.
On NSE Future and Options, total number of contracts traded in index futures was 682881 with a total turnover of Rs 12,034.37 Crore. Along with this total number of contracts traded in stock futures were 386175 with a total turnover of Rs 15,583.22 Crore. Total numbers of contracts for index options were 1284823 with a total turnover of Rs 23,723.20 Crore and total numbers of contracts for stock options were 34676 and notional turnover was Rs 1,512.21 Crore.
Today, Nifty would have a support at 3,732 and resistance at 3,795 and BSE Sensex has support at 12,355 and resistance at 12,712.
Gains may continue
Friday's pullback and result of election may help the market advance further. Global indices are displaying a weak trend in the ongoing trades and may put some pressure on the domestic indices. However, players are maintaining their bets on almost all the sectors. Among the key local indices, the Nifty has a support at 3640 and a break below this level could see it slip further to 3600-3550, while on the upside the index could test higher level at 3710. The Sensex has a likely support at 12025 and may face resistance at 12325.
Major US indices registered loss on Friday, with the Dow Jones lost by 63 points at 8269, the Nasdaq moved down by 9 points to close at 1680.
Most of the Indian ADRs traded firm on the US bourses. Patni Computers led the pack with gains of 5.48% while Infosys, Wipro, Tata Motors, ICICI Bank and Satyam jumped over 1-4% each. Among the laggards Rediff lost 4.23%, VSNL & MTNL dropped 2% each, while Dr Reddy ends with marginal loss.
Crude oil prices raised, with the Nymex light crude oil for June delivery gaining by a cents to close at $56.35 a barrel. In the commodity space, the Comex gold for June delivery raised by $2.90 to settle at $931.30 an ounce.
Market set to surge on UPA's thumping victory in election
The Indian stock market is set to surge today following the impressive performance of the United Progressive Alliance (UPA) in the just concluded Lok Sabha elections. The market will now keenly watch as to who gets the key economic ministries viz. finance, commerce & industry etc.
Prime Minister Manmohan Singh's coalition defied predictions of a tight election and was only about 11 seats short of an majority from the 543 seats at stake, according to election commission data. Congress' alliance took 261 seats, sweeping aside its nearest rival, the bloc led by the Hindu-nationalist Bharatiya Janata Party (BJP), which won only 159 combined. Congress, which alone won 205 seats, needs a handful of partners to reach the 272 seats needed to take power, and is expected to seek the support of more smaller parties or independents. Congress leaders will meet on Tuesday to officially endorse Manmohan Singh as prime minister, after which the party will meet its coalition partners to decide potential new allies.
Armed with a popular mandate, the Congress led UPA government is going to stake claim today to run India for another five years. The Congress and its allies will go to meet President Pratibha Patil today to show that they have the numbers. The first meeting of the newly-constituted Congress Parliamentary Party (CPP) is expected to convened in a day or two to elect its leader. Singh, who is already the Prime Ministerial candidate of the Congress, is also likely to be elected by the MPs at a joint meeting of the UPA parties. The Congress must form a government by 2 June 2009.
Financial sector reforms are likely to get a push in the coming days, which were relegated to the back seat due to persistent opposition from the Left parties, with the Congress-led UPA set to form the next government. Left-less victory of the UPA over BJP-led National Democratic Alliance (NDA) would not only signify the formation of a stable government, but also revive hopes of a slew of pro-market policy changes.
Foreign funds are in aggressive buying modeian stocks. As per the provisional figures on NSE, foreign institutional investors (FIIs) bought shares worth Rs 983.86 crore and domestic funds bought shares worth Rs 432.47 crore on Friday, 15 May 2009. FII inflow in May 2009 totaled Rs 9270.40 crore (till 14 May 2009) while their inflow in calendar year 2009 totaled Rs 9627 crore.
Asian stocks fell today as Panasonic Corp. and Mizuho Financial Group Inc. reported losses and oil prices slumped. Treasuries and the yen advanced as declines in equities prompted investors to seek safe-haven assets. Key benchmark indices in China, Hong Kong, Japan, South Korea and Singapore fell by between 0.95% to 2.86%. Taiwan's Taiwan Weighted rose 0.09%.
The US markets closed lower on Friday, 15 May 2009 as energy shares tumbled on worries about weak demand. The Dow Jones Industrial average was down 62.68 points, or 0.75%, to 8,268.64 and the Nasdaq Composite Index slipped 9.07 points, or 0.54%, to 1,680.14. The Standard & Poor's 500 Index was down 10.19 points, or 1.14%, to 882.88.
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