Post Market Commentary - March 12 2008

Indian market underperforms global peers

The market erased almost entire gains in contrast to strong start after disappointing industrial production figures for January 2008 hit the market in early afternoon trade. The US Federal Reserve’s move to inject up to $200 billion of liquidity into strained credit markets triggered rally across Asian and European markets. Indian benchmarks underperformed all their global peers except China’s Shanghai Composite.

The 30-share BSE Sensex was up marginally by 4.83 points or 0.03% at 16,127.98. Sensex lost 59.06 points at day's low of 16,064.09 touched in late trade. Sensex hit a high of 16,683.37 in early trade. At the day’s high, the Sensex gained 560.22 points. The Sensex oscillated in a band of 619.28 points in the day in volatile trade .

S&P CNX Nifty rose 6.10 points or 0.13% at 4,872.

As per provisional data, FIIs bought shares worth a net Rs 127.94 crore today. Domestic funds sold shares worth a net Rs 528.06 crore.

As per data released by the government today afternoon, growth in index of industrial production (IIP) slipped to 5.3% in January 2008 as compared with 11.6% in January 2007, the lowest since October 2006, when it stood at 4.51%. Growth in the manufacturing sector declined to 5.9% in January 2008 as against 12.3% in January 2007.

The market breadth which was positive throughout the day, turned negative in late trade as small-cap and mid-cap shares succumbed to selling pressure: on BSE 1,448 shares declined as compared to 1220 that advanced. 59 shares remained unchanged.

Metal shares declined on profit booking. India’s largest private sector aluminium maker in terms of sales, Hindalco Industries lost 6.51% to Rs 189.70 on 15.86 lakh shares. It was the top loser from Sensex pack.

Tata Steel, the country’s largest private sector steel maker in terms of sales, slipped 6.48% to Rs 766. The stock slipped sharply from day’s high of Rs 838 in early trade. The company reported 34.22% rise in consolidated net profit to Rs 1,415.54 crore on 428.61% spurt in total income to Rs 32,096.03 crore in Q3 December 2007 over Q3 December 2006. The results were announced before trading hours today, 12 March 2008.

Jindal Stainless (down 4.99% to Rs 138), Steel Authority of India (down 7.40% to Rs 216), and Jindal Saw (down 1.37% to Rs 790), were the other losers from metal pack.

IT pivotals extended losses in late trade. Infosys (down 3.41% to Rs 1379.90), Satyam Computer Services (down 4.74% to Rs 377.10), Wipro (down 0.22% to Rs 391.50), slipped. However India’s largest software services exporter TCS rose 0.58% to Rs 828

DLF (down 5.49% to Rs 708), Reliance Communications (down 2.29% to Rs 538.80), and Tata Motors (down 2.06% to Rs 745), edged lower from the Sensex pack.

Cipla, the country’s third largest pharma company in terms of net sales, advanced 4.03% to Rs 203.70 on 8.21 lakh shares. It was the top gainer from Sensex pack.

India’s largest private sector company in terms of market capitalisation and oil refiner Reliance Industries gained 0.58% to Rs 2360.25 on 8.25 lakh shares. The stock came off session's high of Rs 2428.95.

Private sector banks were firm. They had surged in early trade tracking rally in their ADRs on the New York Stock Exchange (NYSE) on Tuesday, 11 March 2008. India's second largest private sector bank in terms of net profit HDFC Bank rose 2.41% to Rs 1364.10 after its ADR surged 13% on the NYSE. ICICI Bank, the country's largest private sector bank in terms of net profit jumped 3.35% to Rs 883 after its ADR jumped 10% on the NYSE. Both these shares saw strong start with HDFC Bank hitting high of Rs 1430 and ICICI Bank striking high of Rs 915.

However India’s largest bank in terms of assets State Bank of India slipped 5.65% to Rs 1783.90.

Reliance Energy (up 2.94% to Rs 1325), Grasim (up 4% to Rs 2901), and Bharti Airtel (up 2.93% to Rs 812.20), rose from the Sensex pack.

Rural Electrification Corporation settled at Rs 121.30 on BSE, a premium of 15.52% compared to IPO price of Rs 105. The stock debuted at Rs 125, a premium of 19.04% over issue price of Rs 105. The stock hit a high of Rs 128.40 and low of Rs 118.85. The counter saw high volumes of 6.75 crore shares on BSE.

Shares of oil marketing companies declined on reports that Indian crude basket crossed $100 a barrel mark for the first time on Monday, 10 March 2008. Hindustan Petroleum Corporation (down 3.75% to Rs 276), Bharat Petroleum Corporation (down 3.46% to Rs 428.25), and Indian Oil Corporation (down 2.91% to Rs 500), slipped

Marico declined 3.22% to Rs 63.20. The company said it is exiting processed foods business by selling its Sil brand to Danish business house, Good Food Group, for an undisclosed sum. Sil us a small brand in Marico's portfolio, with annual revenue of about Rs 8 crore.

Tata Communications rose 4.74% to Rs 505 on reports it is looking to raise $1 billion to partly fund its expansion plans for the next three years. As per reports, the company is in talks with banks to raise $350 million within a month.

KEC International slipped 1.25% to Rs 715. The stock surged to high of Rs 750 after it said it has bagged two contracts worth Rs 46 crore from Madhya Pradesh Power Transmission Company for the supply and construction of a 220 kilovolt double circuit transmission.

Jaiprakash Associates declined 2.89% to Rs 243.700 As per reports, the company’s wholly owned subsidiary Jaiprakash Infratech may raise Rs 1000 crore through private placement to ICICI Venture.