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Market ended on lower note by getting weak European markets, lower Asian markets and US index futures data which indicated the Dow could open sifnificatly negative. The 30-share index, BSE Sensex opened with a loss of 59.51 points, at 9,559.03 and traded range bound till mid half of the session. The indices then underproformed the region after a weak opening in Euro range and closed to lower end of the day. From morning selling was visible in IT, Teck, oil stocks, index heavyweights, metal and banking stocks. During the session IIP number was also announced but not affected the sentiment of market even after a single digit negative IIP data. Nevertheless, the market breadth, indicating the overall health of the market, was strong. 1307 shares advanced as compared with 1108 that declined. A total of 106 shares remained unchanged.
The Sensex ended the day with a loss of 152.71 points, or 1.59% at 9,465.83 after touching a high of 9,580.13 and a low of 9,445.54. The broad-based NSE Nifty declined 32.65 points, or 1.12% at 2,893.05 after hitting a high of 2,939.00 and a low of 2,886.55.
IIP Data : Government announces Index of Industrial Production (IIP) numbers for the December and it is been came in at negative 2% versus 8% YoY and expectation of minus 0.4%. A significant fall in manufacturing output (-2.5% versus 8.6% YoY) and consumer durables growth (-12.8% versus 2.8%) may have led to the drastic fall. The November IIP number has also been revi:sed to 1.7% from 2.4% earlier.
Inflation : Inflation for the week ended January 31, as expected, came in at 4.39% versus 5.07% WoW. European shares were down by more than 1%, led lower by oils and banks. US stock indices futures too were down in excess of 1%.
Sectoral
Among BSE sectoral indices, IT and Teck indices lost the most, falling 2.5% and 2.3% respectively, while Realty and Auto indices gained the most, putting on 1.3% and 0.9% respectively. M & M and DLF were the top gainers among Sensex stocks, surging 6.9% and 3.6% respectively, while JP Associate and Ranbaxy were the top losers, shedding 4.8% and 3.8% respectively.
Realty : Realty index closed at 1,556.69, up 1.3% or 20.04 points. Realty shares advanced on hopes the forthcoming interim budget may include sops to the housing sector. India's largest real estate firm by market capitalisation DLF advanced 2.49% to Rs 154.60 on recent reports the company has secured long-term loans of about Rs 2000 crore.
Anant Raj Industries (up 4.99%), Akruti City (up 4.89%), and Ansal Infrastructure (up 2.91%), advanced.
As per reports, the government may announce tax sops aimed at boosting the housing sector, which has been identified as a potential driver for the economy and job creation during a slowdown. As things stand, taxpayers are allowed to deduct up to Rs 1.5 lakh of interest paid on home loans from their taxable income. This limit could be raised to Rs 2 lakh. This, if it happens, will enable those who have bought a house for self-use to save up to Rs 68,000 in tax. At present, the maximum anyone can save through this deduction is Rs 51,000.
Another possible sop for the housing sector could be reintroduction of Sec 80IA, under which corporates building dwelling units of less than 1,000 square feet area were exempted from tax on the profits from these units. This move may prompt developers towards constructing smaller houses, making houses more affordable for the lower segment of the market.
Auto : Auto Index ended with a gain of 23.78 points or 0.94% at 2,555.06. Auto shares advanced on hopes of the government could announce some tax sops for the automobile sector. India's top tractor maker by sales Mahindra & Mahindra jumped 6.99% to Rs 300.20 and was the top gainer from the Sensex pack.
India's largest truck maker by sales Tata Motors rose 0.81% to Rs 137.05, off the day's low of Rs 132.50.
Hindustan Motors (up 3.24%), Hero Honda (up 1.57%), Bajaj Auto (up 4.60%), also gained.
Reports indicated that excise duty on big cars with engine capacities of 1200 cc or more in petrol may be reduced to 16% from the existing 20%, post an across-the-board 4% cut in excise in December 2008.
FMCG : Selling was also seen in the FMCG space, wherein United Spirits plunged 9.39%, Ruchi Soya, United Breweries, ITC and Britannia were down 1-2.5%. BSE FMCG Index slipped 0.88%, or 18.05 points, to 2,028.82.
Oil & Gas : Oil & Gas index tumbled 120.88 points or 1.85%, to 6,409.93. India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) fell 2.64% to Rs 1347.50, on profit booking. The stock moved in a range of Rs 1345.60 and Rs 1376 in the day. The stock had advanced 20.24% to Rs 1384.05 in a month to 11 February 2009.
India's largest state-run oil exploration firm by market capitalisation ONGC fell 1.97% to Rs 693.10 on reports the company has revised downwards its profit estimates for the year ending March 2010 by 35% due to the drop in international prices of oil.
Banking : BSE Bankex closed lower by 57.34 points or 1.15%, to 4,916.55. Private sector banking shares slipped fears of rising defaults in a weakening economy offset an overnight rise in American Depository Receipts (ADRs). India's second largest private sector bank by net profit HDFC Bank lost 0.26% to Rs 931 even as its ADR rose 3.78% on Wednesday, 11February 2009. India's largest private sector bank by net profit ICICI Bank slipped 3.42% to Rs 420.50 despite 3.92% gain in its ADR on Wednesday, 11February 2009.
However India's largest bank in terms of assets and branch network State Bank of India rose 0.09% to Rs 1159.45, off day's low of Rs. 1140
IT Sector : BSE IT index underperformed indices, down 2.46% or 54.77 points, to 2,170.96. Infosys tumbled 3.39% and TCS fell 0.94%.
IT pivotals declined as investors feared the new bank rescue plan announced by the US government may not be enough to revive the economy from a deepening recession and on weak ADRs. TCS, India's largest software services exporter by sales slipped 1.18% to Rs 508. India's second largest software services exporter Infosys Technologies shed 3.30% to Rs 1259.60 as its ADR declined 0.44% on Wednesday, 11February 2009. India's fifth largest IT exporter by sales HCL Technologies fell 0.91% to Rs. 114.20
However India's third largest software services exporter, Wipro rose 0.38% to Rs 222.80
IT firms derive a lion's share of revenue from export to the US. IT stocks fell despite a weak rupee. The Indian rupee was marginally weaker on Thursday following decline in Asian stock markets. The partially convertible rupee was at 48.77/78 per dollar, marginally weaker than Wednesday's close of 48.69/70. A weak rupee boosts operating margins of IT firms.
Pharma : India's largest pharma company by sales Ranbaxy Laboratories lost 3.93% to Rs 212.50 after domestic brokerage house Reliance Money recommended a sell rating on the stock, with price target of Rs 189.
Metal : BSE Metal Index shut shop at 5,138.33, down 0.97% or 50.38 points. Tata Steel, Sterlite Ind and SAIL fell 0.6-2.5%.
FMGC : Selling was also seen in the FMCG space, wherein United Spirits plunged 9.39%, Ruchi Soya, United Breweries, ITC and Britannia were down 1-2.5%. BSE FMCG Index slipped 0.88%, or 18.05 points, to 2,028.82.
Power : BSE Power Index was down 8.49 points or 0.47%, to 1,811.48. A mixed picture was also seen in power sector; GMR Infra, Tata Power, GVK Power and Suzlon Energy were losers while Power Grid Corp gained 5.09%. India's largest power generation firm by market capitalisation Tata Power Company fell 1.79% to Rs 793.50. Reportedly the company is scouting for other sources to import about 7 million tonnes of coal for its proposed power plants.
Telecom : India's second largest cellular services provider by net profit Reliance Communications slipped 0.95% to Rs 171.65 despite reports the company is in talks with seven global strategic investors for offloading 5% stake in its tower arm Reliance Infratel for about $500 million.
Spice Communications jumped 47.10% to Rs 77.30 on high volumes of 1.68 crore shares.
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