Pre Session Commentary - Aug 28 2008

The Indian Market is expected to have positive opening as US markets ended higher and Asian markets are trading mixed. On Wednesday, domestic market sharply cut down during final trading hours on the back of heavy selling that led the market to close in red terrain. Market opened with gains tracking positive cues from global markets but was not able to sustain the same momentum and slipped soon after beginning. Domestic market traded in tight range and continued its downward journey ahead of August series derivatives contracts expiry, which is due today. Market lost further momentum and slipped sharply during final trading hours to close with losses. Weak European markets also fueled the negative sentiment. NSE Nifty ended below 4,300 mark and BSE Sensex around 14,300 level. From the sectoral front, all indices closed in red and reality stocks slipped dipper into negative with loss of more than 3%. Along with this Bank, Capital Goods, Oil & Gas, Power and Consumer Durable stocks also witnessed heavy selling from these baskets. The BSE Sensex closed lower by 185.43 points at 14,296.79 and NSE Nifty ended down by 45.10 points at 4,292.10. The BSE Mid Caps closed with losses of 58.34 points at 5,686.43 along with Small Caps ended down by 52.71 points at 6,859.91.

We expect that market may see volatile trade during the trading session ahead of inflation number for the week ended 16th August 2008 due to be released today evening and expiry of August series derivatives contracts today.

On Wednesday, the US market was closed higher. Encouraging data from manufacturing sector had offset the continuous third day jump in crude oil. Light, sweet crude for the October delivery raised $1.88 to settle at $118.15 a barrel on the New York Mercantile Exchange after it touched the peak of $119.63.

The Dow Jones Industrial Average (DJIA) closed higher by 89.64points to close at 11,502.51 along with the NASDAQ index ended up by 20.49 points to close at 2,032.46 and the S&P 500 (SPX) gained 10.15 points to close at 1,281.66.

Indian ADRs ended up. In technology sector, Infosys ended higher by (1.58%) followed by Wipro surged by (1.05%), Patni Computers by (0.95%) and Satyam by (0.32%). In banking sector HDFC Bank gained (0.80%) while ICICI Bank lost (1.15%). In telecommunication sector, Tata Communication ended up by (1.18%) while MTNL dropped by (0.83%). Sterlite industries increased by (0.28%).

Today the major stock markets in Asia are trading mixed. Japan’s Nikkei is trading higher by 7.04 points at 12,760.00 along with Singapore''s Straits Times trading up by 3.34 points at 2,708.43. However, Hang Seng index trading lower by 209.89 points at 21,254.83 and Taiwan Weighted lost 16.97 points at 7,064.00.

The FIIs on Wednesday stood as net seller in equity and in debt. The gross equity purchased was Rs1,426.00 Crore and the gross debt purchased was Rs0.50 Crore while the gross equity sold stood at Rs1,932.00 Crore and gross debt sold stood at Rs46.30 Crore. Therefore, the net investment of equity reported was (Rs506.00) Crore and net debt was (Rs45.80) Crore.

The partially convertible rupee ended at 43.74/75 per dollar, stronger than 43.85/856 close on Tuesday. The Indian rupee gained 11 paise on Wednesday as the Reserve Bank of India (RBI) sold dollars for a second straight session after month-end demand for the U.S. unit from oil firms threatened to push the rupee above 44 per dollar.

Today, Nifty has support at 4,198 and resistance at 4,362 and BSE Sensex has support at 13,911 and resistance at 14,561.