Monday, March 2, 2009

Markets Opened With A Heavy Gap Down - March 2, 2009

The markets today opened sharply lower on the back of negative cues from the global markets. All the sectorial indices are trading in red in the opening trade. Further the merger of RIL with RPL also added to the sentiments. The significant selling pressure witnessed among the Banking, Metal, Oil & Gas, Realty and IT stocks. The BSE Mid Cap and the Small Cap index are also trading lower in the opening trade.

Reliance Industries is trading lower by (1.77%) at Rs. 1,242.70. Reliance Industries and Reliance Petroleum’s boards approved the merger where RPL’s shareholders to receive 1 share of RIL for every 16 shares of RPL. RIL will issue 6.92 crore new shares, thereby increasing its equity capital to Rs.1,643. crore. The merger will be effective from April 1, 2008. The merger will be EPS accretive.

PNB is trading lower by (4.86%) at Rs. 321.20. The public sector bank has reduced car loans by half percentage point to 10.5% with effect from March 1.

The Asian markets are trading lower today as Nikkei 225, Seoul Composite, Straits Times, Hang Seng and Shanghai Composite index are trading down by (4.14%), (4.39%), (3.27%), (3.83%) and (0.37%) respectively.

The US markets on Friday ended lower with the S&P slides to a 12-year low on the back of the fourth quarter GDP readings that showed the US economy shrunk at the sharpest pace since 1982. The US fourth quarter GDP was revised lower to an annual rate of -6.2% versus a previously estimated -3.8%. Further the reports that the government is taking a major stake in Citigroup and GE is slashing its dividend also exacerbated the selling pressure. Citigroup announced it is offering common shares for up to $27.5 billion in existing preferred equity. The government will exchange a maximum of $25 billion face value of its preferred stock, which gives the government a 36% stake in the company. The Dow Jones Industrial Average (DJIA) dropped by 119.15 points to close at 7,062.93. The NASDAQ Composite (RIXF) index decreased by 13.63 points to close at 1,377.84 and the S&P 500 (SPX) fell by 17.74 points to close at 735.09.

The BSE Sensex is now trading below the 8,700 mark and the NSE Nifty trading around the 2,700 mark.

Ranbaxy Laboratories reported the top gainer from the BSE Sensex pack, as it is trading higher by (1.67%) at Rs. 164.50 while Tata Steel reported the top loser down by (3.83%) at Rs. 165.75.

The overall market breadth is negative as 444 stocks are advancing while 952 stocks are declining on BSE.

At 10.33AM, the BSE Sensex was down by 195.78 points at 8,695.83 and the Nifty was down by 63.10 points to 2,700.55.

The BSE Mid Cap decreased by 28.23 points to 2,730.06 and the BSE Small Cap fell by 23.62 points to 3,082.69.

BSE Bankex index is trading lower by 112.76 points or (2.66%) to trade at 4,127.34. The top losers are ICICI Bank decreased by (3.57%) to Rs.316.40, HDFC Bank down by (3.46%) to Rs.854.20, Kotak Bank declined by (3.14%) to Rs.251.10 followed by PNB fell by (3.56%) to Rs. 325.50.

BSE Metal index is trading lower by 111.91 points or (2.39%) to trade at 4,579.06. The major losers are JSW Steel declined by (4.92%) to Rs. 178.80, Tata Steel down by (4.82%) to Rs.164.05, SAIL decreased by (3.62%) to Rs.73.25 followed by Sesa Goa fell by (3.40%) to Rs.78.05.

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