Pre Session Commentary - June 24 2008

The Indian Market is expected to have negative opening on the back of weak global cues as Asian markets are trading lower and US market ended mixed. On Monday, the Indian market closed in red backed by selling across the ground. It opened on downbeat note and covered with black clouds throughout the trading session due to weak global markets along with high oil prices, rising inflation concern and the possibility of it resulting in some monetary tightening measures from the Reserve Bank of India, all contributed to the negative sentiments in the market. Nuke Deal was also the concern for the market. From the sectoral front, metal, capital goods, oil & gas, bank and reality stocks were the major victims of the negative sentiment, while IT stocks were on limelight as maintained to close on positive zone. The BSE Sensex closed lower by 277.97 points at 14,293.82 and NSE Nifty ended down by 81.15 points at 4,266.40. The BSE Mid Cap and BSE Small Cap ended with a deep cut of more than 3% each. We expect bearish market during the trading session.

US markets closed mixed on Monday. Stocks in New York opened on the upbeat note, but the early advance was short-lived, as investors ran away from the financials and Oil prices rose above $136 a barrel on Monday after major energy producers ruled out further output. Bank of America reduced the income estimates for brokerages and Goldman Sachs advised selling bank shares as credit losses stay behind into 2009. American International Group, the largest insurer, dropped to its lowest since 1997, also added to the negative attitude.

The S&P 500 closed marginally higher by 0.07 points at 1,318.00, while NASDAQ ended down by 20.35 points to close at 2,385.74 and Dow Jones Industrial Average (DJIA) dropped by 0.33 points to close at 11,842.36.

Indian ADRs ended mixed. In technology sector, Patni Computers ended up by (1.99%) along with Satyam by (1.79%), Infosys by (1.56%) and Wipro by (0.16%). In banking sector, HDFC bank and ICICI bank decreased by (1.64%) and (1.25%) respectively. In telecommunication sector, Tata Communication and MTNL reduced by (3.64%) and (3.01%). Sterlite industries declined (3.72%).

Today the major stock markets in Asia are trading in negative. Taiwan Weighted is trading lower by 68.67 points at 7,807.82 along with Hang Seng index trading down by 45.95 points at 22,669.01 and Japan’s Nikkei trading at 13,851.04 advanced by 6.43 points.

The FIIs on Monday stood as net seller in equity and debt. The gross equity purchased was Rs2,501.50 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs3,454.00 Crore and gross debt sold stood at Rs56.00 Crore. Therefore, the net investment of equity reported was (Rs952.50) Crore and net debt was Rs56.00 Crore.

Today, Nifty has support at 4,170 and resistance at 4,332 and BSE Sensex has support at 13,920 and resistance at 14,492.