Post-Market Commentary Friday, November 28, 2008

Better-than-expected Q2 GDP growth helps market shrugs off terror attacks
Better-than-expected economic data and on reports that the operation to flush out terrorists at three spots in Mumbai was nearing an end. Volatility was intense ahead of the expiry of November 2008 derivative contracts. Expectations of a further rate cut by the central bank also supported the market.
The BSE Sensex held on the psychological 9,000 level. It had fallen below that level many times in intraday trade.
A denial by the Railways of shooting taking place near the Chhattrapati Shivaji Terminus (CST) station in Mumbai lifted the market in mid-afternoon trade. Earlier, two television channels had reported firing at the station which had pulled the market lower in afternoon trade.
After battling terrorists for two days at the Oberoi-Trident in Mumbai, the National Security Guards today cleared the hotel of terrorists, killing two of them while six bodies were recovered from the premises. Reports suggest that the operation to flush out terrorist at two other spots viz. the Nariman House and at Taj Hotel near the Gateway of India, is at a final stage. The battle between the police and terrorists was still going on in these two spots, more than 36 hours after the terror attacks in Mumbai on Wednesday, 26 November 2008
But the market breadth was negative as the terror attacks weighed on the sentiments which has already been hit by heavy outflow of foreign capital as a result of the global financial crisis which has hit markets worldwide. All the financial and commodity markets remained shut on Thursday, 27 November 2008, in the wake of the major terror strikes in Mumbai, India's financial capital late on Wednesday, 26 November 2008.
Volatility was high. Adding to the volatility was the November 2008 derivatives expiry today, 28 November 2008. As per reports, the Nifty rollover of positions from November 2008 series to December 2008 series stood at 54% while marketwide rollover was 60%, by end of trading on Wednesday, 26 November 2008. The stock exchanges had to postpone expiry of November 2008 contracts as the markets were shut on Thursday after the terror attacks. The November contracts were to expire on Thursday. All the financial and commodity markets remained shut on Thursday, 27 November 2008, after the major terror strikes in India's financial capital.
The BSE 30-share Sensex rose 66 points or 0.73% to 9,092.72.
Nifty rose 2.85 points or 0.10% to 2755.10, underperforming the Sensex. The reason why the Nifty underperformed the Sensex was due to sharp fall in some of its constituents which do not form a part of the Sensex. These three stock have a combined weightage of 1.16% in Nifty.
All the top 3 Nifty losers Unitech (down 11.30%), National Aluminium Company (down 7.74%), and Zee Entertainment (down 4.60%), don't form a part of the 30-share Sensex pack.