Pre Session Commentary - July 17 2008

The Indian Market is expected to have positive opening on the back of strong global cues and drop in crude oil prices. On Wednesday, the Indian market extended its losses to touch a new low on concerns over inflation and political uncertainty. The domestic market opened in positive territory, on crude oil’s support and maintained the strength till afternoon. Further market lost ground tracking negative cues from European market and slipped to close on back foot. The BSE Sensex skidded below 12,600 level and NSE Nifty below 3,900. From the sectoral front, Reality index were completely crushed to close with deep cut of more than 7% as most selling was reported from this basket. Along with this, Metal, Oil & Gas, Bank, Capital Goods and Consumer Durables stocks witnessed the selling pressure. The BSE Sensex closed lower by 100.39 points at 12,575.80 and NSE Nifty ended down by 44.40 points at 3,816.70. We expect that market may go up during the trading session.

TCS Ltd has announced its first quarter ended June 2008, results. Its consolidated net profit under the US GAAP fell marginally to Rs1,243.6 Crore, compared to Rs1,255.8 Crore in the previous quarter with a marginal drop of 0.98%. Revenue in the same period grew 5.2% to Rs6,410.7 Crore.

On Wednesday, the US market was closed in green as oil prices continued to fall for the second day and the financial sector moved up the most in its 19-year history. Oil prices tumbled $4.14 to $134.60 per barrel, after the government reported a surprising spike in U.S. crude and gasoline supplies. The fifth-largest U.S. bank and the second largest mortgage lender Wells Fargo''s better-than-expected earnings sparked the rally that was compounded by short-covering.

The Dow Jones Industrial Average (DJIA) closed higher by 276.74 points at 11,239.28 along with NASDAQ trading up by 69.14 points at 2,284.85 and S&P 500 index closed higher by 30.45 points at 1,245.36.

Indian ADRs ended up. In technology sector, Satyam ended higher by (6.09%) along with Infosys by (5.78%), Wipro by (4.17%) and Patni Computers advanced by (0.18%). In banking sector, ICICI bank and HDFC bank gained (8.56%) and (6.51%) respectively. In telecommunication sector, MTNL and Tata Communication ended up by (7.60%) and (6.32%)). However, Sterlite industries decreased by (0.34%).

Today the major stock markets in Asia are trading in green surge in US bank shares and a sharp drop in oil prices. Hang Seng index is trading higher by 562.15 points at 21,785.65 along with Taiwan Weighted trading up by 59.49 points at 6,927.80 and Japan’s Nikkei trading at 12,902.69 advanced by 217.16 points.

The FIIs on Wednesday stood as net seller in equity and net buyer in debt. The gross equity purchased was Rs2,370.50 Crore and the gross debt purchased was Rs46.60 Crore while the gross equity sold stood at Rs3,050.90 Crore and gross debt sold stood at Rs45.00 Crore. Therefore, the net investment of equity reported was (Rs680.40) Crore and net debt was Rs1.70 Crore.

Today, Nifty has support at 3,755 and resistance at 4,013 and BSE Sensex has support at 12,330 and resistance at 13,169.