Market at close - 20-2-2009

Sell-off in Heavyweights
Fresh selling in index pivotals pulled key benchmark indices to day's low in mid-afternoon trade. The barometer index BSE Sensex which had fallen below the psychologically vital 9,000 level earlier in the day, fell below 8,800 level in mid-afternoon trade. The Sensex was down 248.23 points, or 2.75%, to 8,797.65. It came off the lower level after a sharp slide. The Sensex was off 34.57 points from the day's low.
The selling on the domestic bourses today, 20 February 2009, was broad based with all the sectoral indices on BSE in the red. Weak start of European bourses and weak US index futures weighted on the domestic bourses.
The market opened on a weak note on weak global markets. An intermittent recovery from lower level was witnessed during the day. The recovery from lower level in early afternoon trade was triggered by 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 intraday recovery proved short-lived as the market came off the higher level later.
The government has so far announced two stimulus packages including tax cuts and the capital injections for banks to shield the domestic economy from the impact of the global financial sector crisis and recession in key global economies.
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.
But trading in US index futures which showed the Dow could fall 112 points at the opening bell on Friday, 20 February 2009 and sustained selling by foreign institutional investors (FIIs), whose outflow in calendar year 2009 has totaled Rs 5094.30 crore (till 18 February 2009), weighed on the sentiment on the bourses after the interim budget 2009-10 presented in parliament on Monday, 16 February 2009 proved to be a non-event disappointing marketmen.
According to provisional data on NSE, FIIs were net sellers worth Rs 363.48 crore while mutual funds bought shares worth Rs 108.44 crore on Thursday, 19 February 2009.
European shares fell sharply on Friday, 20 February 2009, with banks the worst performers, as investors continued to fret about the outlook for the global economy. Key benchmark indices in UK, Germany and France were down by between 1.86% and 2.92%.
Asian markets declined today, 20 February 2009, after Wall Street tumbled to six-year low on Thursday, 19 February 2009, as a gloomy US unemployment data reinforced fears the world's largest economy is in a severe slump. Key benchmark indices in Hong Kong, Japan, Singapore, South Korea and Taiwan were down by between 1.76% and 3.72%. However, China's Shanghai Composite rose 1.54%.
US markets tumbled on Thursday, 19 February 2009 on mounting concerns about the fate of major banks and signs that the recession is deepening, pushing the Dow to its lowest level in more than six years. The Dow Jones industrial average lost 89.68 points, or 1.19%, at 7,465.95. The Standard & Poor's 500 Index fell 9.48 points, or 1.2%, at 778.94. The Nasdaq Composite index shed 25.15 points, or 1.71%, at 1,442.82.
US government data showed a record number of continuing unemployment claims, at nearly 5 million, and a surprisingly sharp drop in manufacturing in the mid-Atlantic states.
At 14:25 IST, the BSE 30-share Sensex was down 248.23 points, or 2.75%, to 8,797.65. The Sensex opened 98.85 points lower at 8,943.78, also its day's high. At the day's low of 8,763.08, the Sensex lost 279.55 points in mid-afternoon trade.
The S&P CNX Nifty lost 68.60 points, or 2.46%, to 2,720.05
The market breadth, indicating the overall health of the market, was weak on BSE with 1653 shares declining as compared with 620 that advanced. A total of 95 shares remained unchanged.
BSE clocked a turnover of Rs 1899 crore by 14:25 IST as compared with Rs 1374 crore by 13:25 IST.
All the members from the 30-share Sensex pack were trading lower. TCS (down 5.11%), Wipro (down 3.83%), and Mahindra & Mahindra (down 3.41%), though down, outperformed the Sensex on defensive buying.
Banking stocks were hard hit as fears of rising defaults in a weakening economy and overnight fall in American Depository Receipts (ADRs), offset hopes of rate cuts from the Reserve Bank of India (RBI). India's largest private sector bank by net profit ICICI Bank plunged 7.59% to Rs 334.40 on a 1.36% fall in its ADR on Thursday, 19 February 2009. It was the top loser from the Sensex pack.
India's second largest private sector bank by net profit HDFC Bank lost 2.12% to Rs 866.10 as its ADR fell 0.26% on Thursday, 19 February 2009. After market hours on 19 February 2009, the bank on a private placement basis issued unsecured, non-convertible, redeemable subordinated bonds in the nature of debentures towards tier - II capital as with upper tier - II bonds for an amount aggregating Rs 200 crore and lower tier - II bonds for an amount aggregating Rs 150 crore.
India's largest bank in terms of assets and branch network State Bank of India shed 1.85% to Rs 1040.10.
India's largest dedicated housing finance company by total income Housing Development Finance Corporation fell 3.67% to Rs 1341.50 as the company expects 2009/10 loan growth at about 20%, slightly lower than the previous year's rise, as property demand falls.
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 on Thursday, 19 February 2009, showed. Falling inflation provides 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.
Only on Wednesday, 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.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) shed 3.69% to Rs 1245.90 on fears a worsening global economy will hit demand for petrochemicals.
India's second largest cellular services provider by sales Reliance Communications (RCom) slumped 5.10% to Rs 154.65 on reports the government on Thursday, 19 February 2009 reportedly informed the Parliament that it will do a special audit on the books of RCom and its subsidiaries over allegations that the telecommunications company had diverted revenues earned from its mobile services to a subsidiary to bring down the total amount it had to pay to the government as licence fee and spectrum charge.
India's largest private sector power generation firm by sales Reliance Infrastructure slipped 3.70% to Rs 489.80. The finance ministry late evening on 18 February 2009 reportedly told Parliament that companies Reliance Infrastructure and Reliance Petroleum were being investigated for alleged violation of norms governing insider trading and overseas borrowings, respectively. Reliance Petroleum fell 2.01% to Rs 78.10
Satyam Computer Service advanced 1.62% to Rs 47.05 after it won approval from the Company Law Board (CLB) to bring on board a strategic investor needed to ensure the survival of the scam-tainted software outsourcer.
But India's largest engineering and construction firm by sales Larsen & Toubro fell 3.38% to Rs 619.10 after its chief A M Naik said it will decide on Satyam deal after evaluating the Company Law Board's order on the bidding process for the fraud-hit IT firm. L&T is the single largest shareholder in Satyam with a 12% stake.
India's largest power equipment maker by sales Bharat Heavy Electrical (Bhel) fell 2.11% to Rs 1353.10. The company has reportedly signed an agreement to float a joint venture with US-based technology provider General Electric (GE) to manufacture diesel locomotives for Indian Railways.
India's largest copper maker by sales Sterlite Industries India slipped 3.27% to Rs 248.10 as copper stockpiles climbed on the London Metal Exchange again and a grim global economic picture stoked demand concerns.
Educomp Solutions tumbled 13.73% to Rs 1739.10 after reports the market regulator Securities & Exchange Board of India (Sebi) is probing the dealings in the shares of education software firm on bourses.
Powered By Capitalmarket.com