Post Session Commentary - Sep 17 2008

Domestic markets pared its opening gains to close the day in red territory due to rise in crude oil along with lower Asian markets though they ended mixed. Crude oil for October delivery raised $3.57, to $94.72 a barrel on the New York Mercantile Exchange. Indian markets today opened on positive note on the back of favorable cues from the global markets but was not able to sustain the momentum and quickly turned negative. Further, markets extended their losses in noon deals and continued nervousness for throughout of session, however struggled to recover after mid session but slipped again. Finally, markets closed with losses on sustained selling pressure. From the sectoral front, all indices ended in red and among those Reality shares were worst performer as closed with deep cut of more than 4%. Other than that, Bank, Metal, Oil & Gas, Capital Goods and Pharma stocks were major sufferers of negative sentiment as most of selling was visible from these baskets. The market breadth was negative as 1740 stocks closed in red while 886 stocks closed in green and 86 stocks remained unchanged.

RBI to ease pressure on markets has hiked the maximum interest that banks can pay on NRI deposits by 50 basis points for dollar as well as rupee deposits. The cap on NRE deposits has been raised to LIBOR plus 50 bps while that on FCNR (B) deposits is 25 bps minus LIBOR. Further, Central bank has also decided to allow banks to borrow additional 1% of NTDL or net demand and time liabilities from the repo window.

On the global front AIG rescued by Fed as US government is agreed to lend up to $85 billion emergency loan to AIG for two years in exchange for a 79.9% equity stake and Barclays buys Lehman U.S. unit. Further, US Federal Reserve on Tuesday held short-term interest rates steady at 2%, which was expected to cut to ease growing fears about the health of the US economy.

The BSE Sensex closed lower by 255.90 points at 13,262.90 and NSE Nifty ended down by 66.65 points at 4,074.90. The BSE Mid Caps and Small Caps closed with losses of 77.62 points at 5,139.63 and by 74.66 points at 6,214.75. The BSE Sensex touched intraday high of 13,620.74 and intraday low of 13,127.96.

Losers from the BSE are Sterlite In (8.04%), Ranbaxy Lab (6.60%), ICICI Bank Ltd (5.25%), ITC Ltd (5.07%), HDFC Bank Ltd (3.71%), SBI (3.59%), DLF Ltd (3.29%), Reliance (2.84%), TCS Ltd (2.77%), Tata Steel (2.57%) and JP Associates (2.29%).

The BSE Metal index lost 361.56 points to close at 9,814.93. Major losers are Sterlite In (8.04%), Jindal Steel (6.97%), Nalco (6.87%), Sesa Goa Ltd (6.30%), Gujarat NRE C (4.73%) and NMDC Ltd (3.77%).

The BSE Bank index closed lower by 259.45 points at 6,592.96. Losers are ICICI Bank Ltd (5.25%), Canara Bank (5.03%), Axis Bank (4.26%), IDBI Bank Ltd (4.11%), Bank of India (3.87%) and SBI (3.59%).

The BSE Reality index plunged 172.03 points to close at 3,991.93. As Unitech Ltd (8.78%), Orbit Co (8.27%), Housing Development (7.12%), Indiabull Real (6.00%), Penland Ltd (5.61%) and Sobha Dev (4.06%) closed in negative territory.

The BSE Oil & Gas index ended down by 161.89 points at 8,766.24 as BPCL (6.58%), HPCL (4.90%), Gail India (4.80%), IOC Ltd (4.36%), Reliance Nat Res (3.50%) and Reliance (2.84%) ended in negative territory.

The BSE Capital Goods index closed down by 139.08 points at 11,142.91 Major losers are Jyoti Struct (4.25%), ABB Ltd (3.32%), Reliance Indus Infra (3.12%), Walchand In (3.11%), Suzlon Energy (2.50%) and Kalpat Power T (2.47%).

The BSE Pharma index dropped by 75.97 points to close at 3,864.69. As Ranbaxy Lab (6.60%), Apollo Hos E (5.04%), IPCA Lab Ltd (4.13%), Glenmark Pharma (3.01%), Wockhardt Lt (2.85%) and Dr Reddy’s Lab (2.57%) closed in negative territory.