Pre Session Commentary - Aug 29 2008

The Indian Market is expected to have positive opening as US markets ended higher and Asian markets are trading up. On Thursday, domestic market slipped sharply during final trading hours backed by heavy selling pressure due to the inflation fears and expiry of August series derivatives contracts. Contracts expired on dismal note with 75.3% rollover, which was higher than 67.2% average of last three months. Market opened with gains tracking positive cues from US markets but was not able to maintain the same momentum and slipped soon after beginning. Further domestic market continued its weakness and slipped sharply during last trading hours to close in red. Weak European markets also contributed to the selling pressure. Nifty and Sensex slipped towards 4,200 and 14,000 mark respectively. From the sectoral front, all indices closed in red and Capital Goods, Oil & Gas and Reality stocks lost more than 2%. Followed by Metal, Bank and IT stocks also witnessed heavy selling pressure form these baskets. Midcap and Smallcap stocks lost more than 1%. The BSE Sensex closed lower by 248.45 points at 14,048.34 and NSE Nifty ended down by 80.10 points at 4,214.00. The BSE Mid Caps closed with losses of 77.58 points at 5,608.85 along with Small Caps ended down by 77.61 points at 6,782.30.

We expect that market may gain some ground during the trading session, however the investors will be keeping their eye on GDP numbers for the first quarter of current fiscal, which will be announced by the government today.

India''s inflation, based on the wholesale price index falls to 12.40% during the week ended August 16 2008, as against 12.63% in the previous week, due to decrease in prices of fuel, power, light and lubricants.

On Thursday, the US market was closed higher on encouraging economic data and drop in crude. Second quarter GDP growth was revised upward better than expected to 3.3% from a previously reported 1.9%. Crude oil slipped to $116 per barrel on the back of assurances from the International Energy Agency and the US government that they were prepared to release strategic stockpiles if Hurricane Gustav hits the Gulf of Mexico.

The Dow Jones Industrial Average (DJIA) closed higher by 212.67 points to close at 11,715.18 along with the NASDAQ index ended up by 29.18 points to close at 2,411.64 and the S&P 500 (SPX) gained 19.02 points to close at 1,300.68.

Indian ADRs ended mixed. In technology sector, Infosys ended higher by (0.56%) followed by Satyam surged by (0.37%), while Patni Computers dropped by (0.10%) and Wipro by (0.09%). In banking sector ICICI Bank gained and HDFC Bank gained (2.80%) and (2.40%). In telecommunication sector, Tata Communication ended down by (2.30%) while MTNL advanced by (2.47%). Sterlite industries increased by (2.17%).

Today the major stock markets in Asia are trading higher. Hang Seng index is trading higher by 415.40 points at 21,387.69 along with Japan’s Nikkei trading up by 179.37 points at 13,047.62, Singapore''s Straits Times advanced by 32.56 points at 2,723.56 and Taiwan Weighted gained 17.20 points at 7,050.57.

The FIIs on Thursday stood as net buyer in equity and net seller in debt. The gross equity purchased was Rs1,882.20 Crore and the gross debt purchased was Rs81.50 Crore while the gross equity sold stood at Rs1,602.30 Crore and gross debt sold stood at Rs82.10 Crore. Therefore, the net investment of equity reported was Rs279.90 Crore and net debt was (Rs0.60) Crore.

The partially convertible rupee ended at 43.78/79 per dollar, 0.15 percent weaker than Wednesday''s close of 43.71/72. The rupee weakened as a rise in oil prices sparked dollar buying from refiners, and then steadied as exporters thought the currency was good value and on worries the Reserve Bank of India (RBI) would step in to stem losses.

Today, Nifty has support at 4,152 and resistance at 4,338 and BSE Sensex has support at 13,774 and resistance at 14,486.