Pre Session Commentary - Aug 12 2008

The Indian Market is expected to have positive opening due to the further drop in crude oil along with positive closing of the US markets. The Indian markets on Monday ended the day with smart gains and showed bull run throughout of trading session on sustained buying over the ground. Domestic market opened on strong note tracking favorable cues from the global markets along with steep drop in crude oil prices. Market gained further ground and continued to extend its gains till the end of session. Favorable cues from European market also boosted the positive attitude of investors. Both NSE Nifty and BSE Sensex ended with gains of more than 2%. NSE Nifty ended above 4,600 mark and BSE Sensex crossed 15,500 level. Rate sensitive stocks, infrastructure and oil stocks had played key role in the rally. From the sectoral front, Reality stocks registered gains of more than 5% followed by Oil & Gas, Bank, Metal and Auto stocks, who also contributed in significant buying. However, Consumer Durables and IT stocks remained out of favor as most of the selling was seen from these baskets. The BSE Sensex closed higher by 336.10 points at 15,503.92 and NSE Nifty ended up by 90.90 points at 4,620.40. The BSE Mid Caps and Small Caps closed with gains of 95.71 points and 89.61 points at 5,982.68 and 7,271.35 respectively. We expect that market may trade volatile during the trading session as the investors will be eyeing on the IIP figures which will be released today.

The government will release June 2008 industrial production data on 12 August 2008. Industrial production grew at the slowest pace in more than six years in May 2008, at 3.8%, as against 10.6% in the same month of 2007.

On Monday the US market closed with gains with strength in financials and retailers. Oil prices ran up and down and touched at a new three month low after dropping below $113 a barrel marks. Finally it settled at $114.45 per barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed higher by 48.03 points at 11,782.35 along with NASDAQ closed up by 25.85 points at 2,439.95 and S&P 500 index closed at 1,305.32 up by 9.00 points.

Indian ADRs ended mixed. In technology sector, Satyam ended higher by (2.50%) along with Wipro by (1.83%) while Patni Computers dropped by (0.89%) followed by Infosys by (0.43%). In banking sector, ICICI bank and HDFC bank gained (1.51%) and (0.98%) respectively. In telecommunication sector, Tata Communication and MTNL ended up by (1.47%) and (0.96%). Sterlite industries decreased by (6.02%).

Today the major stock markets in Asia are trading negative despite Wall Street extended the previous week''s gains. Japan’s Nikkei is trading down by 95.04 points at 13,335.87 along with Hang Seng trading lower by 37.06 points at 21,822.28, Taiwan Weighted trading at 7,290.56 down by 35.06 points, Strait Times index trading lower by 11.90 points at 2,813.49 and Seoul Composite is trading down by 7.02 points at 1,574.07.

The FIIs on Monday stood as net suyer both in equity and debt. The gross equity purchased was Rs2,074.90 Crore and the gross debt purchased was Rs194.30 Crore while the gross equity sold stood at Rs1,995.80 Crore and gross debt sold stood at Rs96.80 Crore. Therefore, the net investment of equity reported was Rs79.80 Crore and net debt was Rs97.50 Crore.

The Indian rupee erased all gains and ended lower against the US dollar. The Indian currency ended at 42.16/17, down from 42.06/07 on Friday, as a large company bought dollars offsetting gains due to a rise in stocks and lower oil prices.

Today, Nifty has support at 4,532 and resistance at 4,688 and BSE Sensex has support at 15,192 and resistance at 15768.