Post Session Commentary - Oct 28 2009

The Indian market closed in the negative territory after facing huge volatility during the trading session. The concerns about the sooner than expected rise in the interest rates after RBI raised its inflation forescast, prompt the investors to be bit cautious to book further positions. Moreover, the cues from the global market are not in favor as the US consumer confidence data that fell to 47.7 per cent from a revised 53.4 in September that led the investors to be calculative. From the sectoral front, the bankex stock faced the pressure as they did not announce any hike in the ceiling on the portion of government securities, which the banks can park in held to maturity segment. Moreover, the RBI’s decision to streamline provisioning requirement on non performing assets, where the banks have to ensure that by September 2010, the total provisioning coverage against non performing or bad loans are not less than 70% of the outstanding amount. Apart from this, the consumer durables and PSU stocks also remained in the sellers’ radar. While on the other hand, the Realty stocks made a smart come back from the intraday fall to close with decent gains. The BSE Sensex closed below the 16,300 mark while Nifty just below 4,830 mark. From the sectoral front, Consumer Durables (down (1.79%), Bankex (down 1.50%) and PSU (down 1.15%) while Realty (up 0.88%), Teck (up 0.73%) and Oil and Gas (up 0.69%).
After a dismal opening tracking the weak global cues, the market extend losses further in the early trade but recover from the lows to trade in positive territory as the day progressed but the last final hours of selling in selective indices led the market to close on the backfoot. The market faced the pressure as the traders rolled positions in the derivatives segment from October 2009 series to November 2009 series ahead of the expiry of the October 2009 contracts, scheduled tomorrow. The US markets closed in mixed on Tuesday. Consumer Discretionary stocks were under pressure as retailers retreated following a disappointing Consumer Confidence Index reading of 47.7 for October. Energy stocks outperformed the broader market due to strong trade in oil stocks and rebound in oil prices. Treasuries spurted amid the mixed action among equity. That was supported by a strong 3.6 bid-to-cover outcome for a $44 billion auction of 2-year Treasuries. This helped the broader 10-year Note rose nearly one full point and gusted its yield back below 3.5%.
Today, Finance Secretary Ashok Chawla said that any further measures by the Reserve Bank of India to withdraw special liquidity measures could come in January 2010. He also said that the Centre and state governments do not need to borrow more than planned in the financial year. He said the states would borrow Rs 60,000 crore between November 2009 and March 2010.
Among the Sensex pack 19 stocks ended in negative territory and 11 stocks in positive territory. The market breadth indicating the overall health of the market remained weak as 1,627 stocks closed in red while 1,059 stocks closed in green and 71 stocks remained unchanged in BSE.
The BSE Sensex closed lower by 69.91 points or (0.43%) at 16,283.49 and NSE Nifty closed down by 20.55 points or (0.42%) at 4,826.15. The BSE Mid Caps closed up by 9.41 points at 6,166.89 while the BSE Small Caps closed with losses of 31.69 points at 7,206.53. The BSE Sensex touched intraday high of 16,411.14 and intraday low of 16,144.17.
Losers from the BSE Sensex pack are Maruti Suzuki (4.47%), Tata Steel (3.73%), HDFC (3.23%), ICICI Bank (3.12%), HDFC Bank (3.11%), Reliance Communication (2.50%), ONGC (2.29%) and Sterlite Inds (2.20%).
Gainers from the BSE Sensex pack are Bharti Airtel (3.42%), Wipro (3.19%), Tata Motors (2.62%), RIL (2.28%) and L&T (1.97%).
On the global markets front, the Asian markets that opened before the Indian market, closed in red. Jakarta Composite, Seoul Composite, Hang Seng, Strait Times and Nikkei ended lower by 2.88%, 2.41%, 1.84%, 1.69% and 1.35% at 2,355.31, 1,609.71, 21,761.58, 2,648.98 and 10,075.05 respectively.
European markets, which opened after the Indian market, are trading lower. In Paris the CAC 40 is down by 1.64% at 3,682.59, in Frankfurt DAX index is trading down by 1.58% at 5,545.79 and in London FTSE 100 is lower by 1.72% at 5,111.50.
The Consumer Durables index closed with losses of 61.66 points or 1.79% at 3,374.94. Losers from this pack are Blue Star (2.77%), Videocon Inds (2.57%), Gitanjali GE (2.26%) and Titan INds (0.96%) closed in negative.
The Bankex index closed lower by 145.42 points or 1.50% at 9,533.66. Losers are IDBI bank (3.69%), ICICI Bank (3.12%), HDFC Bank (3.11%), Axis bank (2.48%), Karnataka bank (2.26%) and Canara bank (2.21%) closed in red.
The Realty index closed with gains of 35.60 points or 0.88% at 4,081.64. Gainers from this pack are Indiabull Real (2.96%), HDIL (2.06%), Unitech (1.58%) and DLF (0.31%) closed in green.