Market At Close-19-2-2009

Key benchmark indices ended slightly higher in what was a lackluster trading session in sync with range-bound activity around global indices. Trading was lacklustre with low volumes. The BSE 30-share Sensex provisionally rose 28.38 points, or 0.31%, off 67.71 points from the day's high but 65.76 up points from the day's low. For the second running day, the BSE Sensex settled above the psychologically important 9,000 mark after alternatively moved above and below that level in intra-day trade.
Rate cut hopes and the US index futures data showing the Dow could rise 76 points at the opening bell on Thursday, 19 February 2009 supported the market. Inflation rose at the lowest level in 13-months at 3.92% in the year through 7 February 2009, much lower than previous week's annual rise of 4.39%, data released by the government today, 19 February 2009, showed.
Falling inflation has provided room for the Reserve Bank of India (RBI) to cut interest rates further to shield the domestic economy from the global financial sector crisis and recession in key global economies. Just yesterday, 18 February 2009, the Reserve Bank of India Governor D Subbarao said that there is room to cut interest rates further. The statement comes at a time when the market is expecting further action from the central bank.
Market men see a bigger role for RBI to shield the domestic economy from the global financial sector crisis and recession in key global economies in the coming months as election code will be in force by the end of the month which means that there cannon be any policy action from the government.
Meanwhile, Commerce minister Kamal Nath is likely to announce an export booster package later this month which would address some of the crucial concerns of the exporters. The sops under consideration include simplification of rules for service tax refund, extension of time given to exporters to meet export obligation and an increase in rates of input duty reimbursement schemes like drawback and DEPB for some sectors.
European markets rose with food producers adding most points to the index after Nestle posted 2008 results and beat sales forecasts. Key benchmark indices in UK, Germany and France were up by between 0.51% and 0.66%.
Asian shares were mixed today, 19 February 2009. Key benchmark indices in China, Japan, China and Taiwan were up by between 0.06% and 0.78%. However indices in South Korea and Singapore fell 0.55% and 1.31% respectively.
The Bank of Japan said it will buy 1 trillion yen ($10.7 billion) in corporate bonds from financial institutions and extend lending programs to prevent a shortage of credit from deepening the recession. Governor Masaaki Shirakawa and his colleagues said the bank will buy bonds rated A or higher from 4 March to 30 September 2009. The board kept the overnight lending rate at unchanged at 0.1% in a unanimous vote.
US markets ended mixed on Wednesday, 18 February 2009 as gloomy outlook from Fed and dismal housing data overshadowed government's Housing Relief Plan. The Dow Jones industrial average was up 3.03 points, or 0.04%, to 7,555.63 while the Standard & Poor's 500 Index was down 0.75 points, or 0.10%, to 788.42. The Nasdaq Composite Index slipped 2.69 points, or 0.18%, to 1,467.97.
The US Federal Reserve cut its outlook for the performance of the battered US economy on Wednesday, 18 February 2009 saying it now expects a contraction of between 0.5 and 1.3% this year. Back in mid-November 2008, the Fed projected that 2009 could see anything from a contraction of 0.2% up to expansion of 1.1%. The US central bank also offered a bleaker picture for the employment situation. It said the jobless rate in the US is now expected to reach between 8.5 and 8.8% this year. That is up from the previous forecast of between 7.1 and 7.6%. The US unemployment rate currently sits at 7.6%
Housing starts slumped by a worse than expected 16.8% in January 2009 to 4,66,000 units, the lowest since the Commerce Department started keeping records in 1959. Meanwhile, the number of permits issued for new buildings also fell to an all-time low, down 4.8% to 521,000 units.
President Barack Obama unveiled a $75-billion mortgage relief plan on Tuesday, which would provide incentives to mortgage lenders to help borrowers reduce their payments. In a bid to help restore confidence, the US Treasury Department will also double the size of current financial support to Fannie Mae and Freddie Mac.
The BSE 30-share Sensex rose 28.38 points, or 0.31%, to 9,043.56, as per provisional closing. The Sensex opened 19.72 points higher at 9,034.90. At the day's high of 9,111.27, the Sensex gained 96.09 points in early trade. At the day's low of 8,977.80, the Sensex lost 37.38 points in afternoon trade.
The S&P CNX Nifty rose 17.20 points, or 0.62%, to 2,793.35 as per provisional closing
The market breadth, indicating the overall health of the market, was negative, on BSE with 1290 shares declined as compared with 1091 that advanced. A total of 104 shares remained unchanged. The breadth was much stronger earlier in the day.
Turnover was dull on BSE amounting to of Rs 2422 crore as compared to Rs 2,883.85 crore yesterday, 18 February 2009.
Among the 30-member Sensex pack, 18 gained while the rest slipped. Grasim (up 2.52%), Reliance Infrastructure (up 2.10%), and HDFC (up 1.96%), edged higher from the Sensex pack.
ACC (down 2.29%), Hindustan Unilever (down 1.20%), and Jaiprakash Associates (down 0.29%), edged lower from the Sensex pack.
IT stocks gained as rupee hovered near 2-month low. India's third largest software services exporter, Wipro jumped 5.24% to Rs 220 despite a 1.11% fall in ADR on Wednesday, 18 February 2009. It was the top gainer from the Sensex pack.
India's second largest software services exporter Infosys Technologies rose 2.40% as its ADR gained 0.24% on Wednesday, 18 February 2009. India's largest software services exporter by sales TCS rose 1.57% and India's fifth largest IT exporter by sales HCL Technologies rose 0.32%.
However Satyam Computer Services slumped 5.25% to Rs 46 on reports the restatement of accounts of the software developer may take more than six months as it includes auditing accounts of the past three-to-four years and involves complicated transactions.
The partially convertible rupee was at 49.75 per dollar, stronger from Wednesday's close of 49.92/93. Today's recovery in rupee followed a sharp fall in the past two days that had pulled it to a two-month low. A weaker rupee boosts operating margins of IT firms which earn a lion's share of revenue from exports.
Auto shares rose on hopes lower interest rates will boost sales which are largely driven by finance. Mahindra & Mahindra (up 1.92%), Maruti Suzuki India (up 2.27%), and Tata Motors (up 0.60%), edged higher from the auto pack.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) fell 0.13% to Rs 1293.10. The stock moved in a band of Rs 1281.90 – Rs 1309.90 in the day. Reports on Wednesday, 18 February 2009 RIL may restart crude oil production from its predominantly gas-rich KG-D6 fields next month aided early gains which fizzled out later on profit booking. The field in KG-D6 had commenced crude oil production in September 2008 and had produced over 790,000 barrels up to 9 December 2008, when output ceased due to equipment failure.
Banking shares turned mixed after a firm start despite latest data showing fall in inflation which raised hopes of an interest rate cut. India's second largest private sector bank by net profit HDFC Bank was up 0.96% to Rs 885 even as its ADR slipped 2.72% on Wednesday, 18 February 2009. The stock eased from day's high of Rs 892.70.
However India's largest private sector bank by net profit ICICI Bank fell 2.21% to Rs 361.20 on a 2.52% slide in its ADR on Wednesday, 18 February 2009. The stock had hit a day's high of Rs 378.75 in early trade. India's largest bank in terms of assets and branch network State Bank of India lost 1.27% to Rs 1057.15, after striking high of Rs 1093.45 in intra-day trade.
India's largest private sector aluminium maker by sales Hindalco Industries fell 2.89% to Rs 40.35. The company reportedly plans to raise Rs 25000 crore pledging assets and future earnings of its units.
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