Weak global markets pulled the domestic bourses lower with the
barometer index BSE Sensex falling below the psychologically
important 9,000 level. Nevertheless, a late recovery helped cut the
market cut steep intraday losses. The Sensex lost 199.42 points, or
2.21% at 8,843.21, off 80.13 points from the day's low.
Weak European bourses, lower US index futures and sustained selling
pressure 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. 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.
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.
A sell-off gripped the market in mid-afternoon trade as European
markets, which opened after Indian markets, declined sharply in
early trade. At the day's low of 8763.08, the Sensex shed 3.09% in
mid-afternoon trade. After the sharp slide, the market immediately
witnessed a rebound from lower level as the finance minister's
statement raised hopes for more measures from the government for
the economy. Rate cut hopes also aided the intraday rebound in late
trade.
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.
Global cues were weak. Trading in US index futures showed the Dow
could fall 130 points at the opening bell on Friday, 20 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 2.38% and 3.08%.
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 2.03% 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.
The BSE 30-share Sensex lost down 199.42 points or 2.21% at
8,843.21. 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 52.90 points or 1.9% to 2736.45. Nifty
February 2009 futures were at 2722, a discount of 14.45 points as
compared to the spot closing.
The barometer index BSE Sensex is down 804.10 points or 8.33% in
calendar 2009 from its close of 9,647.31 on 31 December 2008. The
Sensex currently trades at a PE multiple of 10.19 based on
projected earnings per share (EPS) of about Rs 867 for the
30-Sensex firms in the year ending March 2010.
The market breadth, indicating the overall health of the market,
was weak on BSE with 1631 shares declining as compared with 793
that advanced. A total of 88 shares remained unchanged.
BSE clocked a turnover of Rs 2591 crore, lower than Rs 2,428.97
crore on Thursday, 19 February 2009. Turnover in NSE's futures &
options jumped to Rs 43149.65 crore compared with Rs 30637.67 crore
on Thursday, 19 February 2009.
All the sectoral indices on BSE were in the red. The BSE Power
index (down 1.41%), the BSE Auto index (down 1.11%), the BSE PSU
index (down 1.56%), BSE Consumer Durables index (down 1.09%), BSE
Realty index (down 1.93%), the BSE Capital Goods index (down
1.95%), and the FMCG index (down 0.28%), BSE Healthcare index (down
1.12%), BSE Oil & Gas index (down 2.17%), outperfomed the Sensex.
The BSE TECk index fell 2.21%, in line with Sensex's fall.
The BSE IT index (down 2.69%), BSE Bankex (down 3.49%), and BSE
Metal index (down 2.67%), underperformed the Sensex.
Among the 30-share Sensex pack 26 declined while only 4 of them
managed gains. DLF (up 0.74%), ACC (up 0.66%), and Maruti Suzuki
India (up 0.55%), gained from the Sensex pack.
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 7.03% to Rs 336.10 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 0.73% to Rs 1051.80
India's largest dedicated housing finance company by total income
Housing Development Finance Corporation dropped 2.35% to Rs 1359.90
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 2.99% to Rs 1255 on
fears a worsening global economy will hit demand for
petrochemicals. Nevertheless the stock recovered from day's low of
Rs 1241.30.
India's second largest cellular services provider by sales Reliance
Communications (RCom) slumped 4.36% to Rs 155.60 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 3.04% to Rs 493.05. 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
IT shares declined after research firm Gartner warned of an
unprecedented deceleration in IT spending across markets and
geographic regions in 2009, after its annual global survey of Chief
information officer (CIOs).
India's third largest software services exporter, Wipro slipped
2.16% to Rs 215.60 despite a 1.12% rise in ADR on Thursday, 19
February 2009. India's second largest software services exporter
Infosys Technologies lost 2.33% to Rs 1180 as its ADR fell 1.71% on
Thursday, 19 February 2009. India's largest software services
exporter by sales TCS slipped 3.01% to Rs 475 and India's fifth
largest IT exporter by sales HCL Technologies declined 5.08% to Rs
103.60.
Shares of computer hardware firms HCL Infosystems (down 2.50%),
Moser Baer India (down 5.08%), CMC (down 1.07%), Tata Elxsi (down
1.85%), declined.
Overall, the total IT market globally is expected to grow by only
0.5% in 2009, the Gartner report added.
Educomp Solutions tumbled 11.86% to Rs 1776.60 on reports the
market regulator Securities & Exchange Board of India (Sebi) is
probing the dealings in the shares of education software firm on
bourses.
IT shares fell despite a weak rupee. Indian rupee slipped today on
concerns of capital outflows following decline in global markets.
The partially convertible rupee was at 49.86/88 per dollar against
previous close of 49.62. A weaker rupee boosts operating margins of
IT firms which earn a lion's share of revenue from exports.
Rate sensitive real estate shares rebounded in late trade on hopes
lower rates will spur housing demand. India's largest realty
developer by market capitalisation DLF rose 0.74% to Rs 157.50, off
day's low of Rs 147.50. Foreign brokerage Goldman Sachs in its
recent research report lowered DLF's 12-month target price to Rs
124 post weak Q3 December 2008 results.
Unitech (down 1.40% to Rs 28.20, from day's low of Rs 27.60), HDIL
(down 2.15% to Rs 77.60 after touching day's low of Rs76.50), and
Indiabulls Real Estate (down 3.97% to Rs 93.20 after hitting day's
low of Rs 92.50), fell.
India's largest engineering and construction firm by sales Larsen &
Toubro fell 2.47% to Rs 624.80 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 0.58% to Rs 1374.25, off sharply from day's
low of Rs 1347.10. The early fall came on reports quoting Chairman
K. Ravi Kumar said the company expects profit growth to slow to 10%
in the year ending March 2009 on higher raw material costs and
wages, compared with 18% in March 2008.
ABB rose 1.82% to Rs 400.35 after the company reported higher than
expected net profit in the year ended December 2008. ABB's net
profit rose 11.3% to Rs 547.41 crore on a 16.1% increase in total
income to Rs 6967.45 crore in the year ended December 2008 over
December 2007. The company has recommended a dividend of Rs 2.20
per share of face value Rs 2 each for the year ended on December
2008.
Metal stocks fell on worries a weakening domestic and global
economy will hit demand for metals. India's largest copper maker by
sales Sterlite Industries India (down 3.02% to Rs 248.75), Sail
(down 2.50%), Sesa Goa (down 6.22%), Nalco (down 2.02%), declined.
India's largest private sector steel maker by sales Tata Steel
dropped 2.44%
India's largest private sector aluminium maker by sales Hindalco
Industries fell 1.50% to Rs 39.50. As per recent reports, the
company plans to raise Rs 25000 crore by pledging assets and future
earnings of its units.
Auto stocks fell on profit booking after a recent rise. The BSE
Auto index was down 1.11% to 2,544.47 today, 20 February 2009. The
BSE Auto index rose 2.15% in one month to 19 February 2009.
Tata Motors (down 0.45%), Mahindra & Mahindra (down 3.62%), Hero
Honda Motors (down 1.81%) declined. However Bajaj Auto (up 0.76%)
and Maruti Suzuki India (up 0.55%), rebounded from day's low.
FMCG shares were mixed, outperforming the Sensex, on defensive
buying. Hindustan Unilever (down 0.22%), Britannia Industries (down
0.28%), ITC (down 0.03%), United Spirits (down 1.38%), and Nestle
India (down 0.26%), declined. Some FMCG shares Dabur India (up
0.11%), Tata Tea (up 4.36%) and Marico Industries (up 0.60%) rose
Educomp Solutions was the top traded counter on BSE with turnover
of Rs 293.70 crore followed by Reliance Industries (Rs 170.30
crore), United Spirits (Rs 153.30 crore), ICICI Bank (Rs 127 crore)
and State Bank of India (Rs 92 crore).
Satyam Computer Services topped volumes chart on BSE clocking
volumes of 1.44 crore shares followed by Firstsource Solutions
(80.20 lakh shares), Wire & Wireless India (76.67 lakh shares),
Unitech (74.40 lakh shares) and Spice Communications (65.67 lakh
shares).
Great Eastern Shipping Company climbed 2.56% to Rs 172.05 as Baltic
Exchange's chief sea freight index Baltic Dry Index which tracks
rates to ship dry commodities, hit a four-month high on Thursday,
19 February 2009.
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