Pre Session Commentary - July 4 2008

The Indian Market is expected to have positive opening on the back of mixed global cues. Indian stocks were crushed down on Thursday, as record high crude oil prices battered the world markets and dampened investor sentiment on fears of weak global economy along with political worries and inflation fear. Market opened on extremely negative note on tracing the unfavorable global cues and continued to slip sharply till end. It was a very bad day for the market as BSE Sensex traded around 13,000 points and NSE Nifty 3,900. From the sectoral front, all indices closed in red and among those Metal, Capital Goods, Reality and Bank stocks were worst performers as witnessed most of the selling pressure. Reality index slipped over 9% and Metal over 8%. The BSE Sensex closed lower by 570.51 points at 13,094.11 and NSE Nifty ended down by 167.60 points at 3,925.75. We expect that market may remain volatile during the trading session and inflation figure, which have to come out today will give further direction to the market.

The Bombay Stock Exchange has decided to make replacements in the BSE Mid-Cap and BSE Small-Cap index as per its periodic review, which will be effective from 14th July.

US markets closed mixed on Thursday on relief payrolls data that came in close to expectations and with record oil price boosting energy shares. Crude futures settled at a new record of 145.29 dollars a barrel on the New York Mercantile Exchange. U.S. employers reduced 60,000 jobs in June, as compared to 62,000 in May, while the June unemployment rate was 5.%, unchanged from May, according to the Labor Department.

The Dow Jones Industrial Average (DJIA) closed higher by 73.03 points at 11,286.54 along with S&P 500 up by 1.38 points to close at 1,262.90 and NASDAQ dropped by 6.08 points to close at 2,245.38.

Indian ADRs ended mixed. In technology sector, Satyam ended up by (0.04%) while Wipro remained unchanged and Infosys dropped by (2.29%) along with Patni Computers by (0.19%). In banking sector, HDFC bank advanced by (1.21%) and ICICI bank decreased by (0.88%). In telecommunication sector, MTNL increased by (5.07%) and Tata Communication dropped by (6.95%). Sterlite industries declined (4.55%).

Today the major stock markets in Asia are trading mixed. Hang Seng index is trading higher by 194.62 points at 21,437.40 while Japan’s Nikkei trading down by 40.87 points at 13,224.53 and Taiwan Weighted trading at 7,360.29 reduced by 33.81 points.

The FIIs on Thursday stood as net seller in equity and net buyer in debt. The gross equity purchased was Rs3,468.10 Crore and the gross debt purchased was Rs294.90 Crore while the gross equity sold stood at Rs3,818.60 Crore and gross debt sold stood at Rs74.20 Crore. Therefore, the net investment of equity reported was (Rs350.40) Crore and net debt was 220.70 Crore.

Today, Nifty has support at 3,828 and resistance at 4,018 and BSE Sensex has support at 12,792 and resistance at 13,468