Market Closing Session - 5th March

Snapping a four-day losing streak, the key benchmark indices surged in late trade today. Volatility was high. Index heavyweight Reliance Industries witnessed an upward momentum at the fag end of the trade. Software stocks were the flavor of the day. Banking, realty and power stocks dropped

19 out of 30 stocks from the Sensex pack were in the green. The market breadth was weak. European markets, which opened after Indian market, were in the green. Asian markets, which open before the Indian markets, were mixed.

The market remains close tomorrow, 6 March 2008 on account of Mahashivratri.

Trading on the bourses will halt between 11:45 IST to 12:30 IST daily till 18 March 2008 due to sun outage. The trading time has been extended till 16:15 IST.

The 30-share BSE Sensex rose 202.19 points or 1.24% at 16,542.08. The Sensex gained 255.75 points at sessions high of 16,595.64, hit at the fag end of the day. The index lost 86.87 points at the days low of 16,253.02, hit in early trade.

The broader CNX S&P Nifty was up 57.15 points or 1.17% at 4921.40.

As per provisional data, FIIs sold shares worth a net Rs 285.03 crore today. Domestic funds sold shares worth a net Rs 131.68 crore.

The BSE Sensex had plunged 1484.59 points or 8.32% to 16,339.89 on 4 March 2008 from 17824.48 on 28 February 2008, hit by Budget blues. Traders, domestic funds and some foreign institutional investors (FIIs) are likely to be hit by a hike in short term capital gains tax on sale of shares to 15% from 10%, which amounts to a massive 50% hike in the tax rate, in Union Budget 2008-09 announced on Friday, 29 February 2008.

The change in tax treatment of the Securities Transaction Tax (STT) in the budget, meanwhile, may impact arbitrage volumes on the bourses. STT will now be treated like any other deductible expenditure against business income for the assesse. This is against the current practice whereby an assesse gets 100% rebate for STT paid against the tax liability for the year. A fall in arbitrage will result in decline in liquidity on the bourses.

The Indian economy is currently witnessing a moderation in growth from a solid growth last year mainly due to sluggish consumption growth. Concerns also remain about possible spike in inflation. Analysts reckon that the finance minister (FM) has targeted these two areas in Union Budget 2008-09, which he unveiled on Friday, 29 February 2008.

FM seeks to revive consumption growth through higher disposable income in the hands of the middle class through remit in personal income tax slabs, which will result in substantial tax saving for individual tax payers. Analysts also reckon that the implementation of the Sixth Pay Commission, which will result in hike in salaries of government employees, will aid consumption growth. The Sixth Pay Commission was constituted in October 2006 to recommend comprehensive changes in salary structure of the government employees.

The measures aimed at inflation control include a major fillip to agricultural and irrigation sector to boost farm production, across the board cut in Cenvat to 14% from 16% and specific excise duty cuts.

The BSE Mid-Cap index fell 0.95% at 7,114.18, while the BSE Small-Cap fell 1.60% at 8,809.79. Both these indices underperformed the Sensex.

The market breadth was weak: on BSE 760 advanced as compared to 1942 that declined. 48 stocks remained unchanged.

BSE clocked a turnover of Rs 5348 crore as against Rs 5,819.09 on Tuesday, 4 March 2007.

Nifty March 2008 futures were at 4915.10, a discount of 6.3 points as compared to spot closing of 4921.40.

The NSE's futures & options (F&O) segment turnover was Rs 33581.65 crore, which was lower than Rs 40644.5 crore on Tuesday, 4 March 2008.

India's largest private sector bank by assets ICICI Bank fell 1.15% to Rs 960.40, off sessions low of Rs 925. The stock declined after some reports on Wednesday, 4 March 2008 suggested the bank lost $264 million on account of the subprime crisis. However, ICICI Bank's Joint Managing Director Chanda Kochhar clarified that ICICI Bank may have to provide for another $50 million of investment losses in this quarter on top of $70 million already provided for in Q3 December 2007. The write off will be due to its investments being marked to market rather than provisioning for a subprime loss as many large international banks have done.

Indias largest private sector firm by market capitalization and oil refiner Reliance Industries (RIL) rose 2.29% to Rs 2292.75 on reports its unit Reliance Retail has signed a joint venture with Pearle Europe for the launch of a chain of optical stores in India

Indias biggest state-run oil refiner by market capitalisation ONGC rose 3.05% to Rs 987.90 after the Macquarie Research raised the rating on the stock to outperform from neutral and raised 12-month price target to Rs 1,100 from Rs 1,050 earlier. The increase in the stock rating was based on Macquarie Researchs expectation that crude oil prices will remain high.

Top Sensex gainers were, Satyam Computer (up 6.70% at Rs 433.80), ITC (up 5.09% at Rs 194.25), Housing Development Finance Corporation (up 4.50% at Rs 2755.25), Hindalco Industries (up 4.10% at Rs 208.10), and Maruti Suzuki (up 3.80% at Rs 940.15).

Top Sensex losers were, Bajaj Auto (down 3.26% at Rs 2128.05), Reliance Energy (down 3.01% at Rs 1459.45), Bharti Airtel (down 2.44% at Rs 750.20), HDFC Bank (down 1.54% at Rs 1336.40) and Hindustan Unilever (down 1.51% at Rs 225.55).

The BSE IT index rose 3.82% to 3,752.47. It outperformed the Sensex. Satyam Computer (up 6.70% at Rs 433.80), Financial Technologies (rose 5.91% at Rs 1,926.15), Infosys Technologies (up 3.87% at Rs 1,474.85), Wipro (up 3.25% at Rs 430.75) and TCS (up 2.48% at Rs 874.70), moved up.

The BSE Bankex fell 1.55% to 8,916.03. It underperformed the Sensex. Bank of India (down 7.64% at Rs 286.05), Bank of Baroda (down 6.50% at Rs 311.55), Oriental Bank of Commerce (down 6.38% at Rs 212.05), and Federal Bank (down 2.69% at Rs 280), slipped.

Indian Overseas Bank (down 5.96% at Rs 146.05) and Union Bank of India (down 6.63% at Rs 152.90) and Punjab National Bank (up 1.30% to Rs 523.30) got their rating cut to neutral from outperform by Credit Suisse after the government proposed waiving Rs 60,000 crore of loans to farmers. Credit Suisse cut Punjab National's share price target by 29% to Rs 535, Indian Overseas Bank by 31% to Rs 155 and Union Bank of India by 29% to Rs 169.

According to Credit Sues, the risk perception associated with agricultural lending for government banks has risen significantly. Uncertainty is likely to continue for at least two quarters until the loan waiver is finalized.

The BSE Power index fell 1.20% to 3,341.10. It underperformed the Sensex. GVK Power & Infrastructure (down 7.45% at Rs 40.40), Reliance Power (down 4.10% at Rs 376.25), Areva T&D (down 3.26% at Rs 1860), Tata Power (down 3.18% at Rs 1,197.30) and Torrent Power (down 2.62% at Rs 129.95), declined.

The BSE Realty index fell 1.56% to 8,335.48. It underperformed the Sensex. Omaxe (down 5.54% at Rs 221.60), Sobha Developers (down 2.27% at Rs 795.55), Housing Development & Infrastructure (down 2.01% at Rs 710.30), Indiabulls Real Estate (down 1.32% at Rs 543.65), went down. However, DLF rose 0.47% to Rs 681.35.

Indias second biggest real estate developer Unitech fell 4.27% to Rs 312.55 on reports it has put on hold a $1.5 billion qualified institutional placement planned for the first quarter of 2008, on account of the instability in domestic stock markets and the global liquidity crunch.

Reliance Capital clocked the highest turnover of Rs 289.50 crore on BSE. Reliance Energy (Rs 198.47 crore), ICICI Bank (Rs 184.91 crore), Reliance Natural Resources (Rs 181.71 crore) and Reliance Industries (Rs 176.17 crore), were the other turnover toppers in BSE in that order.

Reliance Natural Resources registered highest volume of 1.52 crore shares on BSE. Ispat Industries (1.02 crore shares), Reliance Petroleum (87.14 lakh shares), Tulsi Extrusion (68.36 lakh shares) and Essar Oil (64.78 lakh shares), were the other volume toppers on BSE in that order.

In Europe, key indices in UK, Germany and France were up between 0.32% to 1.16%.

Asian markets were trading mixed today, 5 March 2008. Key indices in China, Singapore, and Japan were down between 0.16% to 0.99%. However, key indices in South Korea, Hong Kong and Taiwan were up between 0.05% to 0.16%.

US markets closed mixed on Tuesday, 4 March 2008, after taking a beating in early trade. Fed Chairman Ben Bernanke said that defaults and foreclosures in the housing market were likely to increase and urged banks to forgive further mortgage delinquencies.

The Dow Jones industrial average slipped 45.10 points, or 0.37%, to 12,213.80. The Standard & Poor's 500 index declined 4.59 points, or 0.34%, to 1,326.75, while the Nasdaq composite index gained 1.68 points, or 0.07 %, to 2,260.28.