Tuesday, February 17, 2009

Market Commentary 17th Feb 2009

Indian market extended its losses to close with huge deep cut mainly due to the disappointment from the interim budget. Stocks tumbled since initial bell along with other Asian markets on intensive selling across the board. Market plummet as on 16th Feb 2009, acting Finance Minister Pranab Mukherjee had not announced any new scheme or tax initiative in the interim budget. Negative European markets along with lower US index futures also fueled the negative sentiments. 

The domestic market today opened sharply lower tracking weak cues from Asian markets on dismal Japanese growth data. US markets remained closed on Monday for President''s Day holiday. Further, benchmark indices continued to lose ground without any sign of recovery on heavy sell off. The traders were also disappointed as the much-awaited interim budget failed to provide any sops to the required sectors. Finally, market ended the day in red zone to continue its yesterday’s downfall. BSE Sensex ended below 9,050 mark and NSE Nifty closed below 2,800 level. From the sectoral front, traders off-loaded position across the sectors. Among those, Consumer Durable, Reality, Bank, Metal, IT, Teck, Oil & Gas and Power stocks contributed to most of the selling pressure. Midcap and Smallcap stocks also got hammered during the trading session. 

Among the Sensex pack 29 stocks ended in red territory and 1 in green. The market breadth indicating the overall health of the market remained in favour of decliners as 1722 stocks closed in red while 682 stocks closed in green and 100 stocks remained unchanged in BSE.

The BSE Sensex closed lower by 270.45 points at 9,035 and NSE Nifty ended down by 78 points at 2,770.50. Broader market indices were in red as BSE Mid Caps and Small Caps ended with losses of 67.63 points and 78.15 points at 2,853.12 and 3,245.99 respectively. The BSE Sensex touched intraday high of 9,213.40 and intraday low of 8,994.34. 

Losers from the BSE Sensex pack are Tata Steel (6.74%), ICICI Bank (5.69%), DLF Ltd (5.19%), M&M Ltd (5.01%), Hindalco (4.74%), RCom (4.53%), HDFC (4.37%), Reliance (3.90%), Tata Power (3.87%) and HDFC Bank (3.77%).

Only gainer from the BSE Sensex pack is ITC Ltd (0.08%).

On the global markets front, the Asian markets, which opened before Indian market, ended lower as worse than expected slump in Japan''s fourth quarter GDP numbers raised concerns about deteriorating global economy. The world''s second-biggest economy shrank 3.3% from the previous quarter, or at an annual rate of 12.7%. The Shanghai Composite index also gave up its winning rally due to lack of new stimulus measures from Beijing. Shanghai Composite, Hang Seng, Nikkei 225, Straits Times and Seoul Composite index ended down by 69.95, 510.48, 104.66, 42.78 and 48.28 points at 2,319.44, 12,945.4, 7,645.41, 1,637.92 and 1,127.19 respectively. 

European markets which opened after the Indian market are also trading in red as investors remained nervous on the health of the global economy and disappointing corporate results. In London FTSE 100 is trading lower by 55.24 points at 4,079.51 and in Frankfurt the DAX index is trading down by 77.23 points at 4,289.41.

The BSE Reality index ended lower by (4.85%) or 73.70 points to close at 1,445.67 after the interim budget failed to provide any relief to the sector reeling under a severe credit crunch. Orbit Co (8.77%), Penland Ltd (7.82%), Ansal Infra (6.70%), Unitech Ltd (6.14%), Housing Dev (5.72%) and DLF Ltd (5.19%) ended in negative territory.

The BSE Consumer Durables index faced heavy selling pressure and closed with decrease of (4.80%) or 80.21 points at 1,590.95. Scrips that lost are Videocon Ind (6.08%), Titna Ind (5.55%), Gitanjali GE (4.75%), Rajesh Export (53.60%) and Blue Star L (2.33%).

The BSE Bank index ended down by (4.41%) or 211.41 points at 4,583.37 on weak sentiment for financial sector globally. Main losers are Bank of India (7.39%), Oriental Bank (6.67%), ICICI Bank (5.69%), PNB (5.43%), Bank of Baroda (4.90%) and Federal Bank (4.73%).

The BSE Metal stocks ended down by (3.98%) or 200.3 points at 4,830.72 as import duty remained unchanged in the interim budget. Main losers are Tata Steel (6.74%), Hindalco (4.74%), Welspan Guajrat (4.37%), Steel Authority(4.27%), Sesa Goa Ltd (4.02%) and Jindal Steel (3.92%).

The BSE IT index also ended lower by (3.24%) or 68.58 points at 2,047.62 on feeble outlook for US, which is main market for them. Losers are Financ Tech (5.19%), Rolta Ind (5.05%), Aptech Ltd (3.83%), Moser Bayer (3.79%) and Infosys Tech (3.59%).

The BSE Oil & Gas index dropped by (2.98%) or 186.71 points to close at 6,077.96. Aban Offshore (4.15%), Reliance (3.90%), Gail India (3.62%), Reliance Natural Resources (3.13%) and Cairn Ind (2.56%) ended in red.

Unitech plunged by 6.14% on the back of the report that the promoters have pledged 49.48% of their total 64.4% in the company in order to secure additional security for the loans availed by the company.

DLF ended down by 5.19% due to problem relating to acute liquidity crunch and poor buyer sentiments.

M&M Ltd tumbled 5.01%. The merger of Punjab Tractors Ltd (PTL) with M&M Ltd became effective from 16th Feb 2009. The company has fixed March 4 as the ''record date'' for ascertaining the shareholders of the PTL, who would be entitled to receive equity shares of the company as per the scheme of amalgamation.

Power Grid lost 4.37%. The company’s board has approved investments of Rs.51.81 billion to strengthen its transmission network in the southern, northern and western grid. The investment will be made over the three years period.

Oil and Natural Gas Corporation declined 1.48%, on falling global crude oil prices.

Oracle Financial Services Software ended higher by 3.85%. The company today announced Oracle Flexcube Direct banking 5.0, an internet and mobile banking application that addresses the direct banking needs of financial institutions ranging from traditional brick and mortar and click and mortar institutions to direct business entities of the banks.

Source : AsianCERC