Pre Session Commentary - June 26 2008

The Indian Market is expected to have positive opening on the back of favorable global cues. On Wednesday, the Indian market closed in green due to the buying support in key indices. The domestic market opened on downbeat note and slipped sharply lower due to the sharp sale off in early session backed by RBI’s hike in the key lending rate and the CRR by 50 basis points each to curb inflation that hit a 13-year high early in June. RBI on Tuesday raised the key lending rate to 8.5% from 8.0% with immediate effect. RBI will raise the cash reserve ratio to 8.75% from 8.25% in two stages, to 8.5% from July 5 and to 8.75% from July 19. Further, market gained ground as investors bought shares at lower levels to close in green. From the sectoral front, metal, oil & gas, capital goods and reality stocks led the advance, while banks, IT and FMCG continued to drag. The BSE Sensex closed higher by 113.49 points at 14,220.07 and NSE Nifty ended up by 61.55 points at 4,252.65. We expect that market gain some ground during the trading session.

US markets closed higher on Wednesday after some volatile trading following the Fed''s decision to keep the interest rates unchanged. A drop in oil prices and moderately encouraging economic reports boosted the market. Yesterday, crude oil futures dropped $2.45, to settle at $134.55 a barrel after a report that showed U.S. fuel demand fell to its lowest level since January 2007 as record prices restricted the purchases.

The NASDAQ closed higher by 32.98 points at 2,401.26 along with S&P 500 up by 7.68 points to close at 1,321.97 and Dow Jones Industrial Average (DJIA) advanced by 4.40 points to close at 11,811.83.

Indian ADRs ended up. In technology sector, Wipro advanced by (2.26%) along with Satyam by (1.09%), Infosys by (0.91%) and Patni Computers by (0.45%). In banking sector, ICICI bank and HDFC bank increased by (2.57%) and (1.57%) respectively. In telecommunication sector, Tata Communication and MTNL rose (3.12%) and (2.27%). Sterlite industries inclined (0.54%).

Today the major stock markets in Asia are higher. Hang Seng Index is trading higher by 160.72 points at 22,795.88 along with Japan’s Nikkei trading up by 59.43 points at 13,889.35 and Taiwan Weighted trading at 7,879.35 advanced by 24.29 points.

The FIIs on Wednesday stood as net buyer in equity and net seller in debt. The gross equity purchased was Rs3,366.20 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs3,.92.10 Crore and gross debt sold stood at Rs187.40 Crore. Therefore, the net investment of equity reported was Rs274.10 Crore and net debt was (Rs187.40) Crore.

Today, Nifty has support at 4,172 and resistance at 4,345 and BSE Sensex has support at 13,938 and resistance at 14,524.