Pre Session Commentary - May 30 2008

The Indian Market is likely to open in positive zone on the back of favorable global cues as the US market closed in green and the Asian markets are showing positive trend. On Thursday, domestic markets closed in red after giving up its initial gains due to heavy selling through last trading hours and fuel price worries. the government postponed the decision on a possible oil price hike for next two to three days. Also, the expiry of the May 2008 derivatives contract adds to the sentiment. The Nifty rollover for May 2008 stood at 57% as against 62% in April 2008 contract. The market opened with gain tracking the global cues but was unable to sustain the momentum and turned volatile. Further, it was not able to recover from negative sentiment and took back steps to close in negative. The banking, oil & gas and auto stocks remained out of favor till the end of trading session while the capital goods stocks were in limelight as most of the buying was seen from this basket. The BSE Sensex closed down by 209.11 points at 16,316.26 and NSE Nifty fell by 83.05 points to close at 4,835.30. We expect that the market may remain volatile and also investors’ attitude will depend on the inflation figures, which will come out today.

Market controller SEBI has modified the registration guidelines for FIIs. Now institutions formed by non-resident Indians can also register as FIIs and invest in the Indian stock markets. To be registered as FIIs they do not have to invest as proprietary funds and can invest in collective investment schemes. Now sovereign wealth funds, pension funds and endowment funds also allowed to be registered as FII.

On Thursday, the US market closed in positive. The Dow Jones Industrial Average (DJIA) closed higher by 52.19 points at 12,646.22 along with NASDAQ went up by 21.62 points to close at 2,508.32 and S&P 500 by 7.42 points to close at 1,398.26.

Indian ADRS ended mixed In technology sector, Satyam raised by (3.89%) along with Wipro by (2.37%), Infosys by (2.19%) while Patni Computers dropped by (0.53%). In banking sector, ICICI bank and HDFC bank decreased by (0.97%) and (0.83%) respectively. In telecommunication sector, MTNL and Tata Communication fell by (3.81%) and (0.83%). Sterlite industries went up by (0.47%).

Today the major stock markets in Asia are trading mixed. Japan’s Nikkei is trading up by 115.88 points at 14,240.35 along with Hang Seng index trading high by 15.24 points at 24,399.23 while Taiwan Weighted trading down at 8,579.90 by 105.02 points.

The FIIs on Thursday stood as net seller in equity. The gross equity purchased was Rs3,264.4 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs3,998.3 Crore and gross debt sold stood at Rs0.00 Crore. Therefore, the net investment of equity reported was Rs(733.9) Crore and net debt was Rs0.00 Crore.
Today, Nifty has support at 4,726 and resistance at 4,928 and BSE Sensex has support at 15,925 and resistance at 16,583.