Pre Session Commentary - July 3 2008

The Indian Market is expected to have negative opening on the back of weak global cues, along with concern for rising oil prices and high inflation worries. On Wednesday, the Indian market closed with handsome gains tracking cues from the European markets, which gave a ray of hope to the investors to book their positions. Market opened on positive note backed by the mixed global cues but was not able to sustain the momentum and soon turned down. Further, it was volatile till mid session and took sharp turn to recover since afternoon. The BSE Sensex bounced back by crossing the 13,650 level mark and NSE Nifty above 4,050, as both rallied more than 5% in a day. From the sectoral front Metal, Capital Goods, Reality, Oil & Gas and Bank stocks posted decent gains while FMCG counter was out of favor due to the selling pressure. The unexpected rush for key stocks of Realty index had sustained up the BSE Realty index with an impressive advance of 12%. The BSE Sensex closed higher by 702.94 points at 13,664.62 and NSE Nifty ended up by 196.60 points at 4,093.35. We expect that market may decline during the trading session.

US markets closed lower on Wednesday as oil prices soared above $144.27 a barrel on the New York Mercantile Exchange and General Motors faced further questions over its liquidity. The Dow Jones Industrial Average (DJIA) closed lower by 166.75 points at 11,215.51 along with NASDAQ down by 53.51 points to close 2,251.46 and S&P 500 dropped by 23.39 points to close at 1,261.52.

Indian ADRs ended mixed. In technology sector, Patni Computers ended up by (6.54%) along with Infosys by (0.30%) and Satyam by (0.04%) while Wipro dropped by (1.27%). In banking sector, ICICI bank decreased by (0.22%) while HDFC bank gained (1.79%) respectively. In telecommunication sector, MTNL advanced by (0.73%) while Tata Communication reduced by (2.36%). Sterlite industries declined (0.90%).

Today the major stock markets in Asia are trading down on signs of further deterioration in the US economy and fresh record highs of oil prices. Hang Seng index is trading lower by 238.89 points at 21,456.56 along with Taiwan Weighted trading down by 143.81 points at 7,210.05 while Japan’s Nikkei trading at 13,277.18 with a fall of 9.19 points.

The FIIs on Wednesday stood as net buyer in equity and net seller in debt. The gross equity purchased was Rs3,151.10 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs2,976.90 Crore and gross debt sold stood at Rs197.80 Crore. Therefore, the net investment of equity reported was Rs174.20 Crore and net debt was (Rs197.80) Crore.

Today, Nifty has support at 3,978 and resistance at 4,161 and BSE Sensex has support at 13,174 and resistance at 13,911.