Friday, February 20, 2009

Market commentary 20-02-09

Intense selling over the counters pulled the Indian market to end in negative territory with loss of more than 2%. Benchmark indices were weighed down by negative cues from US markets as continuing jobless claims reached record highs of 4.99 million as against the economist’s forecast of 4.81 million continuing claims. Negative European markets also fueled the downbeat attitude.

The domestic market tumbled since initial bell following weak cues from the global markets. US stock markets declined on Thursday, with the Dow Jones Industrial Average touching a six-year low on the back of renewed selling effort in financial stocks fueled pressure in the broader market. Market tried to recover a bit on acting Finance Minister Pranab Mukherjee''s comments that the government will provide additional resources to stimulate demand and provide more help to key sectors such as housing, infrastructure and real estate. However, the positive impetus was short and benchmark indices continued to slip sharply lower. Further, huge selling from Foreign Institutional Investors (FIIs) extended pressure in the domestic bourses. Stocks witnessed enormous sell off throughout the trading session to close the last day of week stridently downward. BSE Sensex ended below 8,850 mark and NSE Nifty closed below 2,750 level. From the sectoral front, all indices ended in red mainly contributed by Bank, IT, Metal, Teck, Oil & Gas, Reality and Capital Goods stocks. Midcap and Smallcap stocks also plunged during the trading session. 

The Indian market will remain closed on Monday 23rd Feb 2009, for the celebration of Mahashivratri.

Among the Sensex pack 28 stocks ended in red territory and 2 in green. The market breadth indicating the overall health of the market remained weak as 1656 stocks closed in red while 758 stocks closed in green and 86stocks remained unchanged in BSE.

The BSE Sensex closed lower by 199.42 points at 8,843.21 and NSE Nifty ended down by 52.9 points at 2,736.45 Broader market indices were in red as BSE Mid Caps and Small Caps ended with losses of 46.68 points and 53.51 points at 2,791.72 and 3,160.59 respectively. The BSE Sensex touched intraday high of 8,943.78 and intraday low of 8,762.48. 

Losers from the BSE Sensex pack are ICICI Bank (7.07%), RCom (4.55%), Reliance Infra (3.38%), TCS Ltd (3.23%), Sterlite Industries (3.16%), Reliance (3.1%), M&M Ltd (3.07%), L&T Ltd (2.83%) and HDFC (2.80%).

Only two gainers from the BSE Sensex pack are ACC Ltd (0.83%) and Maruti Suzuki (0.24%).

On the global markets front, the Asian markets which opened before Indian markets ended sharply lower except China. Market tumbled on continued worries about a deepening global recession and the health of the financial sector along with US markets losses overnight. Hang Seng, Nikkei 225, Straits Times and Seoul Composite index ended down by 324.19, 141.27, 34.41 and 41.15 points at 12,699.17, 7,416.37, 1,594.94 and 1,065.95 respectively. However Shanghai Composite index ended up by 34.35 points at 2,261.48.

European markets which opened after the Indian market are also trading down. FTSE 100 is trading lower by 97.15 points at 3,921.22 and the DAX index is trading down by 130.39 points at 4,084.82.

The BSE Bank index ended down by (3.49%) or 155.67 points at 4,298.91 due to the fears of rising defaults in present economic condition along with fall in ADRs. Main losers are ICICI Bank (7.07%), Oriental Bank (4.14%), Axis Bank (3.94%), 3.59 Bank (5.20%) and Bank of Baroda (3.19%).

The BSE IT index also ended lower by (2.69%) or 56.32 points at 2,038.51 on prolonged recession in US. Losers are Aptech Ltd (5.32%), HCL Tech (5.27%), Financ Tech (4.71%), Oracle Fin (4.47%) and Moser Bayer (4.19%).

The BSE Metal stocks down by (2.67%) or 128.5 points at 4,692.47 due to high volatility in metal prices in international markets. Main losers are Sesa Goa Ltd (6.79%), JSW Steel (5.44%), Steel Authority (3.35%), NMDC Ltd (3.34%) and Sterlite Industries (3.16%).

The BSE Teck index ended lower by (2.21%) or 38.75 points to close at 1,718.26. Aptech Ltd (5.32%), HCL Tech (5.27%), Wire& Wirles Ltd (5.25%), RCom (4.55%) and Oracle Fin (4.47%) ended in negative territory.

The BSE Oil & Gas index dropped by (2.17%) or 133.74 points to close at 6,023.43. Aban Offshore (5.58%), Essar Oil Ltd (3.60%), Reliance (3.10%), Reliance Pet (1.88%) and ONGC Ltd (1.10%) ended in red.

The BSE Capital Goods index faced heavy selling pressure and closed with decrease of (1.95%) or 118.56 points at 5,953. Scrips that lost are Everest Kanto (6.57%), Usha Martin (5.76%), Gammon Indi (3.61%), Suzlon Energy (3.61%) and Areva (3.41%).

Satyam Computer Service lost 1.73%. The company won approval to bring on board a strategic investor needed to ensure the survival of the scam-tainted software outsourcer. The Company Law Board (CLB) said Satyam could raise its authorised shares on issue to 140 crore from 80 crore, and a board member said criteria for a stake sale could be finalized next week.

Larsen & Toubro fell 2.83% after its chief said it will decide on Satyam deal after evaluating the Company Law Board''s order on the bidding process.

GMR Infrastructure ended down by 1.83%. The company informed that GMR Holdings Pvt. Ltd (''GHPL''), promoter and holding Company of GMR Infrastructure Ltd (''the Company'') has purchased 3,05,319 Equity Shares of Rs 2/- each on February 16, 2009 through open market purchase in normal segment on the Stock Exchanges. Consequent to the aforesaid acquisition of 3,05,319 Equity Shares, GHPL now holds 135,12,04,029 (74.215%) Equity Shares of Rs 2/- each of the Company.

Shares of RCom have declined by 4.55% after reports stated that the government planning a special audit on the company and its subsidiaries.

Educomp Solutions lost 12.10% after reports that the Securities & Exchange Board of India is investigating the dealings in the shares of education software firm Educomp Solutions on bourses. SEBI is examining the matter with regard to dealings in the shares of Educomp Solutions on the stock exchange.

Maruti Suzuki India rose 0.24% after the company said it expects sales growth in February 2009 at around 5-7%.
Content Provided by Asian CERC