Post Session Commentary - June 6 2008

The Indian Market is expected to open higher on the back of strong global cues as the US market closed in green and the Asian markets are trading with gain. On Thursday, the Indian market closed with handsome gains after recovering from earlier losses. The market opened with the negative attitude and remains volatile throughout the trading session due to the inflation worries. But it started recovering smartly after the mid session to close on a confident note due to favorable global cues and oil prices hitting a three-week low. From the sectoral front, the IT, Banking and Metal stocks were in limelight as most buying was witnessed from these baskets. The BSE Sensex closed higher by 254.93 points at 15,769.72 and NSE Nifty closed up by 91.35 points at 4,676.95. We expect that the market may gain some grounds in the first half and the declaration of the inflation figure by the government will set the further direction to the market in the second half during the trading session.

Oil prices witnessed fall in Asian trading on Thursday along with fresh concerns of weakening global growth which would reduce energy demand.

On Thursday Indian rupee declined almost to Rs43 against the dollar despite central bank’s intervention to check sharp falls. RBI may increase interest rates if the rupee falls further, as imported inflation would rise much above the its comfort level.

On Thursday, the US market closed with strong gains on the back of profits reported by retail stores and expectation of telecommunications giant Verizon about adding to its holdings. The Dow Jones Industrial Average (DJIA) closed higher by 213.97 points at 12,604.45 along with NASDAQ went up by 46.80 points to close at 2,549.94 and S&P 500 advanced by 26.85 points to close at 1,404.85.

Indian ADRS ended high. In technology sector, Wipro went up by (5.75%) along with Infosys by (5.74%), Satyam by (5.31%) and Patni Computers by (1.55%). In banking sector, ICICI bank and HDFC bank increased by (5.51%) and (4.97%) respectively. In telecommunication sector, Tata Communication and MTNL grew by (9.83%) and (5.95%). Sterlite industries increased by (4.28%).

Today the major stock markets in Asia are trading higher on the back of US market overnight gains. Hang Seng index is trading up by 255.95 points at 24,511.24 along with Japan’s Nikkei trading advanced by 222.02 points at 14,563.14 and Taiwan Weighted trading at 55.14 down by 8,793.60 points.

The FIIs on Thursday stood as net seller in equity and debt. The gross equity purchased was Rs3,245.70 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs4,070.90Crore and gross debt sold stood at Rs15.00 Crore. Therefore, the net investment of equity reported was (Rs825.20) Crore and net debt was Rs15.00 Crore.

Today, Nifty has support at 4,585 and resistance at 4,792 and BSE Sensex has support at 15,442 and resistance at 16,092