Pre Session Commentary - July 2 2008

The Indian Market is expected to have negative opening on the back of weak cues from the Asian markets. On Tuesday, the Indian market closed in deep red after going through a blood bath due to rise in crude oil prices along with political uncertainty and inflation worries. Crude oil prices reached to a new high of $141 a barrel as the IAEA director informed that oil supplies will remain tight. Market opened on positive note on the back of mixed global cues but slipped soon sharply and continued to trade weak till end. It was a very bad day for the market as BSE Sensex closed below 13,000 mark for the first time since April 2007 and NSE Nifty below 3,900. From the sectoral front, all indices closed in red with reality stocks ended with a huge cut of 7% and bank and metal indices with more than 5%. Metal, Bank, Reality, Oil & Gas and Capital Goods stocks were worst performers as witnessed most of the selling. The BSE Sensex closed lower by 499.92 points at 12,961.68 and NSE Nifty ended down by 143.80 points at 3,896.85. We expect that market may remain volatile during the trading session.

India on Tuesday moved out of the coveted trillion-dollar stock market league as the cumulative worth of all the listed companies in the country fell to $966 due to the 500 point fall in the benchmark Sensex.

US markets closed up after a volatile session on Tuesday on late-session interest in the financial sector among bargain-hunters. A speculation that General Motors may post better sales for the month, helped the US market to close in positive territory.

The Dow Jones Industrial Average (DJIA) closed higher by 32.25 points at 11,382.26 along with NASDAQ up by 11.99 points to close at 2,304.97 and S&P 500 advanced by 4.91 points to close at 1,284.91.

Indian ADRs ended mixed. In technology sector, Satyam ended up by 0.24%) along with Infosys by (0.02%) while Patni Computers ended down by (3.98%) and Wipro dropped by (3.20%). In banking sector, ICICI bank and HDFC bank decreased by (4.62%) and (3.47%) respectively. In telecommunication sector, MTNL and Tata Communication reduced by (3.52%) and (0.11%). Sterlite industries declined (2.26%).

Today the major stock markets in Asia are trading mixed. Singapore''s Straits Times rose 10.18 points at 2,916.97 while Hang Seng index is trading lower by 303.23 points at 21,798.78 along with Japan’s Nikkei trading down by 131.22 points at 13,331.98 and Taiwan Weighted trading at 7,406.64 advanced by 1.34 points.

The FIIs on Tuesday stood as net seller in equity and net buyer in debt. The gross equity purchased was Rs2,865.00 Crore and the gross debt purchased was Rs171.70 Crore while the gross equity sold stood at Rs3,092.20 Crore and gross debt sold stood at Rs0.00 Crore. Therefore, the net investment of equity reported was (Rs227.10) Crore and net debt was 171.70 Crore.

Today, Nifty has support at 3,787 and resistance at 3,965 and BSE Sensex has support at 12,513 and resistance at 13,212.