Pre Session Commentary - June 27 2008

The Indian Market is expected to have negative opening on the back of weak global cues as US markets ended on back foot and Asian markets are trading in deep red. On Thursday, the Indian market closed in green due to short covering of the ahead of the expiry of the June derivatives contract that led the buying support in key indices. The market opened on upbeat note tracking the favoring cues from the global markets as the US Federal Reserve’s decision on Wednesday to keep the interest rates unchanged at 2%, which was according to the expectation. Further, the market was not able to sustain the same momentum and lost its gains. But selective buying at the final hours led the market close in positive territory. From the sectoral front, the oil and gas and metal stocks were in limelight as most buying was witnessed from these baskets. The BSE Sensex closed higher by 201.75 points at 14,421.82 and NSE Nifty ended up by 63.2 points at 4,315.85. We expect that market may decline during the trading session and inflation number which is due out to be today will give further direction to the market.

US markets closed lower on Thursday as Oil prices touched above $ 140 a barrel also contributed to the negative sentiment. Also the credit-market write downs and a slowing economy threatened to extend the longest slump in quarterly profits since 2002 adds to the sentiments.

The Dow Jones Industrial Average (DJIA) closed lower by 358.41 points at 11,453.42 along with NASDAQ down by 79.86 points to close at 2,321.37 and S&P 500 dropped by 38.82 points to close at 1,283.15.

Indian ADRs ended down. In technology sector, Satyam dropped by (6.05%) along with Wipro by (5.22%), Infosys by (3.86%) and Patni Computers by (2.93%). In banking sector, HDFC bank and ICICI bank decreased by (5.51%) and (5.14%) respectively. In telecommunication sector, Tata Communication advanced by (0.06%) while MTNL reduced by (1.11%). Sterlite industries declined (1.48%).

Today the major stock markets in Asia are trading in red shares plunged on Wall Street and high inflation worries. Hang Seng index is trading lower by 592.71 points at 21,862.96 along with Taiwan Weighted trading down by 311.64 points at 7,500.16 and Japan’s Nikkei trading at 13,515.12 dropped by 307.20 points.

The FIIs on Thursday stood as net seller in equity. The gross equity purchased was Rs2,901.60 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs3,005.20 Crore and gross debt sold stood at Rs187.40 Crore. Therefore, the net investment of equity reported was (Rs103.60) Crore and net debt was 0.00 Crore.

Today, Nifty has support at 4,170 and resistance at 4,384 and BSE Sensex has support at 13,979 and resistance at 14,632.