Pre Session Commentary - July 1 2008

The Indian Market is expected to have positive opening on the back of mixed global cues. On Monday, the Indian market closed sharply lower at its lowest level in more than a year. Market slipped to deep red on rising crude oil and domestic political uncertainty. In the domestic political scenario, left parties has again threatened to pull out support from the UPA if government went to IAEA and there are signs that Congress may go ahead with the deal even if it leads to the collapse of the UPA coalition and early elections. Possible early election will be a risk for the market. Market opened flat tracking the mixed global cues and was trading volatile. Further, selling pressure among the indices dragged the market significantly lower. From the sectoral front, Oil & Gas, Capital Goods, Reality, Bank and Consumer Durables stocks were under pressure, while IT and Pharma stocks witnessed some buying interest. The BSE Sensex closed lower by 340.62 points at 13,461.60 and NSE Nifty ended down by 96.10 points at 4,040.55. We expect that market may remain range bound during the trading session.

US markets closed mixed on Monday as oil prices receded from a record high on the New York Mercantile Exchange. Oil prices reached above $143 a barrel but traded lower by midday to close at $140.36 a barrel

The Dow Jones Industrial Average (DJIA) closed marginally higher by 3.50 points at 11,350.01 along with S&P 500 up by 1.62 points to close 1,280.00 while NASDAQ dropped by 22.65 points to close at 2,292.98.

Indian ADRs ended mixed. In technology sector, Wipro ended up by (1.42%) along with Infosys by (1.00%) while Patni Computers dropped by (6.26%) and Satyam by (1.88%). In banking sector, ICICI bank decreased by (3.03%) while HDFC bank gained (0.14%) respectively. In telecommunication sector, MTNL reduced by (0.23%) while Tata Communication advanced by (1.94%). Sterlite industries declined (1.49%).

Today the major stock markets in Asia are trading mixed. Hang Seng index is trading higher by 59.66 points at 22,102.01 along with Japan’s Nikkei trading up by 48.85 points at 13,530.23 while Taiwan Weighted trading at 7,492.71 with a fall of 30.83 points.

The FIIs on Monday stood as net seller in equity and debt. The gross equity purchased was Rs3,348.60 Crore and the gross debt purchased was Rs105.00 Crore while the gross equity sold stood at Rs4,094.70 Crore and gross debt sold stood at Rs366.70 Crore. Therefore, the net investment of equity reported was (Rs746.20) Crore and net debt was (Rs261.70) Crore.

Today, Nifty has support at 3,963 and resistance at 4,113 and BSE Sensex has support at 13,120 and resistance at 13,736.