Pre Session Commentary - July 25 2008

The Indian Market is expected to have negative opening due to the weak global cues as US market ended with huge losses and Asian markets are trading on back foot. Increase in crude oil price will also add to the negative sentiment . On Thursday, the Indian market closed with losses. The domestic market opened on positive note tracking positive global cues, but was not able to sustain the momentum and slipped to negative territory. Further continuous selling led the market to close on down beat note due to the inflation worries. The BSE Sensex touched the 15,000 mark during early trading but ended below 14,800 and NSE Nifty closed below 4,500. From the sectoral front, the Oil & Gas index index was in limelight as was able go gain favor from market. While the Metal, Capital Goods, bank and IT stocks remained out of favor as witnesses most of the selling from these baskets. The BSE Sensex closed lower by 165.27 points at 14,777.01 and NSE Nifty ended down by 49.20 points at 4,433.55. We expect that market decline further during the trading session.

Inflation for the week ended 12th July 2008, eased marginally by 0.02% and stood at 11.89 % in comparison to 11.91% of previous week. The wholesale price index-based inflation declined marginally mainly on account of lower prices of imported edible oils, cotton seed oil, groundnut oil and spices.

On Thursday, the US market closed with losses due to the rise in crude oil prices and weak home sales data that hit a 10-year low. Light, sweet crude for September delivery raised $1.05 to close at $125.49 a barrel on the New York Mercantile Exchange. The sales of existing homes dropped by 2.60% in June, in comparison to the previous month, to an annualized rate of 4.86 million, according to the National Association of Realtors.

The Dow Jones Industrial Average (DJIA) closed lower by 283.10 points at 11,349.28 along with NASDAQ ended down by 45.77 points at 2,280.11 and S&P 500 index closed lower by 29.65 points at 1,252.54.

Indian ADRs ended down. In technology sector, Satyam ended lower by (5.79%) along with Infosys by (5.40%), Wipro by (5.01%) and Patni Computers down by (2.49%). In banking sector, ICICI bank and HDFC bank lost (10.59%) and (8.27%) respectively. In telecommunication sector, Tata Communication ended down by (6.57%) while MTNL ended higher by (2.51%). Sterlite industries decreased by (8.97%).

Today the major stock markets in Asia are trading weak for the first time in five days on the concern of increase in credit market losses and Wall Street losses over night. Hang Seng index is trading lower by 361.42 points at 22,726.30 along with Japan’s Nikkei trading down by 209.50 points at 13,393.81 and Taiwan Weighted trading at 7,222.01 dropped by 146.07 points.

The FIIs on Thursday stood as net buyer in equity and net seller in debt. The gross equity purchased was Rs6,017.90 Crore and the gross debt purchased was Rs253.83 Crore while the gross equity sold stood at Rs4,382.30 Crore and gross debt sold stood at Rs306.00 Crore. Therefore, the net investment of equity reported was Rs1,635.00 Crore and net debt was (Rs52.20) Crore.

Today, Nifty has support at 4,288 and resistance at 4,496 and BSE Sensex has support at 14,289 and resistance at 15,046.