Post Market Commentary - Feb 25 2008

Market ends higher; breadth weak

The key benchmark indices, which opened with a positive gap but soon turned weak amid high volatility in eary trade, bounced back strongly in afternoon trade on account of sustained buying in oil & gas and information technology stocks.

Market breadth was weak. Cement pivotals spurted. Oil & Gas, IT stocks rose. Consumer durables stocks declined. The market breadth was weak. 25 stocks from 30-member Sensex pack were in the green.

Reliance Power surged 8.05% to Rs 450.40 on BSE, above its issue price of Rs 450 offered during recently concluded public issue

This is the first time the stock is trading at premium as compared to issue price of Rs 450 per share. On its listing on 11 February 2008, the stock debuted on 11 February at Rs 547.80 and hit a high of Rs 599.90. However barely within minute of its debut, it started declining and slipped to discount. The stock surge today after its board-approved issue of three bonus shares for every five held, to compensate for the slump in the stock price post listing.

The Reliance Power counter saw high volumes of 1.77 crore shares on BSE.

From the Sensex pack, ACC (up 5.9% to Rs 818.35), Ambuja Cements (up 4.43% to Rs 122.55), Reliance Energy (up 4.29% to Rs 1,622.70) and Grasim Industries (up 4.21% to Rs 2,012) are among the major gainers.

Bajaj Auto (down 4.04% to Rs 2,202.95), Hindustan Unilever (down 0.16% to Rs 215.40) and Mahindra & Mahindra (down 0.03% to Rs 628.60) edged lower.

Oil & Gas stocks rose. India’s largest private sector firm by market capitalization and oil refiner Reliance Industries (RIL) rose 5.02% to Rs 2,551.70. As per reports, Reliance Retail is locked in ‘substantial’ discussions to float an equal joint venture with iconic UK fashion retailer Marks & Spencer (M&S) for apparel, gourmet food and cafes.

Among thr other oil & gas sector stocks, Cairn India (up 2.74% to Rs 212), Gail India (up 4.34% to Rs 406.15), ONGC (up 1.55% to Rs 1,013.45) edged higher.

India’s largest truckmaker by sales Tata Motors rose 1.53% to Rs 705.35. It has reportedly started the process of raising nearly $2.5 billion, mostly from the overseas markets, by giving the mandate to a group of banks. A large chunk of this fund is expected to be utilised to purchase luxury British brands Jaguar and Land Rover from the US carmarker Ford, the reports added.

India’s largest IT exporter by sales Tata Consultancy Services declined 0.29% to Rs 900.05. The company and the Nasdaq-listed Cognizant are reportedly in a race to acquire the billion-dollar systems integration business (SI) of Germany-based T-Systems. T-Systems is the IT solutions unit of Deutsche Telekom, Europe’s telecommunications giant.

Among the other IT sector stocks, Infosys (up 2.11% to Rs 1,613.45), Wipro (up 4.06% to Rs 439.55) and Satyam Computer Services (up 2.62% to Rs 450.30) edged higher.

Consumer Durable stocks declined. Videocon Industries (down 1.52% to Rs 421.40), Blue Star (down 3.33% to Rs 469.05), Titan Industries (down 2.55% to Rs 1,161.05) and Lloyd Electric (down 2.52% to Rs 124) edged lower.

India's biggest power equipment maker by sales Bharat Heavy Electricals rose 1.27% to Rs 2,085.10. The company and Nuclear Power Corporation of India (NPCIL) are reportedly planning to float a joint venture to take up construction activities for nuclear power plants. At present, NPCIL generates about 3,900 mega watts (MW) of electricity from its 16 power plants. The company plans to more than double its capacity to 10,000 MW over the next six years.

Banking stocks recovered. Indian bank unions called off a planned two-day strike that was due to start on Monday after the unions and banking officials decided to meet next month to resolve their differences.

HDFC Bank declined 3.54% to Rs 1,422.70.The Board of Centurion Bank of Punjab (CBoP) at the meeting held on 23 February 2008, has given an in-principle approval for a merger of CBoP with HDFC Bank. The board of CBoP will meet on 25 February 2008 to consider the terms of the merger including swap ratio after receipt of the valuation reports. Centurion Bank of Punjab declined 14.45% to Rs 48.25.

Among the other banking sector stocks, State Bank of India (up 0.61% to Rs 2,127.55) and ICICI Bank ( up 0.97% to Rs 1,110.05) edged higher.

Reliance Natural Resources clocked the highest volume of 1.79 crore shares on BSE. Reliance Power (1.77 crore shares), Centurion Bank of Punjab (1.5 crore shares), Ispat Industries (67.6 lakh shares) and Reliance Petroleum (65.22 lakh shares) are among the other volume toppers in that order.

Reliance Power clocked the highest turnover of Rs 782.24 crore on BSE. Reliance Natural Resources (Rs 241.2 crore), Reliance Capital (Rs 218.25 crore), ICICI Bank (Rs 214.62 crore) and State Bank of India (Rs 197.7 crore) were among the other turnover toppers in that order.

Inflation based on the wholesale price index (WPI) rose to 4.35% for the week ended 9 February 2008 from 4.07% in the previous week, data released by the government today showed.