Pre Session Commentary - June 18 2008

The Indian Market is expected to open on negative note on the back of weak global cues as the US market closed in red and Asian markets are trading mixed. On Tuesday, the Indian market closed with handsome gains due to heavy buying over the ground. The domestic market showed lots of volatility in opening but it jumped up and sustained the momentum till end backed by easing crude oil price and favoring opening of the European markets that gave a support to the market. Encouraging advance tax numbers also boosted the market. The BSE Sensex closed above 15600 mark and the NSE Nifty 4600 mark. The crude oil price reached an all time high of $139.89 a barrel on Monday and it slipped back to $132.84 on Tuesday before ending the day at $134.61. From the sectoral front, all indices closed in green in addition to this banking, capital goods, reality and oil & gas stocks held most of the gains of market. The BSE Sensex closed higher by 301.08 points at 15,696.90 and NSE Nifty ended up by 80.50 points at 4,653.00. We expect that market may remain cautious during the trading.

US markets closed lower on Tuesday after the government reported a decline in housing starts to their lowest level in more than 17 years and a sharp rise in producer prices in May. The U.S. Commerce Department reported starts of new houses have declined 3.3% on the month in May. Production in factories, mines and utilities declined 0.2% for the same month after dropping 0.7% in April. Bank shares dropped after Goldman Sachs warned on credit crisis. According to Goldman, banks may need to raise another $65 bn in capital to shore up balance sheets weakened by the mortgage crisis , which adds on to negative sentiment.

The Dow Jones Industrial Average (DJIA) closed lower by 108.78 points at 12,160.30 along with NASDAQ down by 17.05 points to close at 2,457.73 and S&P 500 dropped by 9.21 points to close at 1,350.93.

Indian ADRs ended mixed. In technology sector, Patni Computers went up by (0.03%) while Infosys dropped by (0.32%) along with Satyam by (0.12%) and Wipro by (0.04%). In banking sector, ICICI bank and HDFC bank advanced by (1.22%) and (0.71%) respectively. In telecommunication sector, Tata Communication rose (4.16%) however MTNL fell by (1.77%). Sterlite industries inclined (0.86%).

Today the major stock markets in Asia are trading mixed. Japan’s Nikkei is trading higher by 57.40 points at 14,405.77 along with Hang Seng index trading up by 40.34 points at 23,098.33, while Taiwan Weighted trading at 8,194.77 with a fall of 7.02 points.

The FIIs on Tuesday stood as net seller in equity. The gross equity purchased was Rs2,282.80 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs2,815.70 Crore and gross debt sold stood at Rs0.00 Crore. Therefore, the net investment of equity reported was (Rs532.80) Crore and net debt was Rs0.00 Crore.

Today, Nifty has support at 4,539 and resistance at 4,728 and BSE Sensex has support at 15,324 and resistance at 15,920.