Pre Session Commentary - Aug 4 2008

The Indian Market is expected to have negative opening due to weak global cues as US markets closed in red and Asian markets are trading lower. On Friday, the Indian market made a smart recovery from its initial losses and closed with gains on IAEA discussion on India specific safeguard agreement for use of nuclear power for civilian use. The domestic market opened on negative note and was hovering in red zone early trading. Further market gained some ground during mid session and staged a smart bounce back due to selective buying over the ground to end in green territory. NSE Nifty ended above 4,400 mark and BSE Sensex above 14,600 level. On the sectoral front, Capital goods and Power stocks were in the limelight and closed with gains of more than 3%. In addition to this, Oil & Gas and Bank stocks also closed with gains of more than 3%. Other than these, Metal, Reality and IT stocks also contributed in positive sentiment. The BSE Sensex closed higher by 300.94 points at 14,656.69 and NSE Nifty ended up by 80.60 points at 4,413.55. We expect that market may lose some ground during the trading session.

The market also got a boost on Friday, after the government announcement of new guidelines for 3G spectrum. According to the Telecom minister, the government will hold a global auction for third generation mobile services for both GSM and CDMA players.

Telcos who missed on the first round of 3G auctions, now they will have to pay much higher price for these radio frequencies when they are auctioned at a later stage.

On Friday, the US market was closed in red due to than expected loss from general motors and rise in crude oil prices that increased to $125 a barrel. General Motors reported a $15.5 billion net loss for second quarter.

The Dow Jones Industrial Average (DJIA) closed lower by 51.70 points at 11,326.32 along with NASDAQ ended down by 14.59 points at 2,310.96 and S&P 500 index closed lower by 7.07 points at 1,260.61.

Indian ADRs ended up. In technology sector, Satyam ended higher by (4.55%) along with Infosys by (2.69%), Patni Computers by (2.22%) and Wipro by (1.60%). In banking sector, ICICI bank and HDFC bank gained (2.67%) and (1.91%) respectively. In telecommunication sector, MTNL and Tata Communication ended up by (3.45%) and (0.24%). Sterlite industries increased by (0.42%).

Today the major stock markets in Asia are trading weak. Hang Seng index is trading down by 227.26 points at 22,635.64 along with Japan’s Nikkei trading lower by 133.53 points at 12,961.06. Taiwan Weighted is trading at 6,981.52 down by 21.02 points.

The FIIs on Friday stood as net buyer in equity and debt. The gross equity purchased was Rs3,828.00 Crore and the gross debt purchased was Rs155.40 Crore while the gross equity sold stood at Rs3,231.00 Crore and gross debt sold stood at Rs7.70 Crore. Therefore, the net investment of equity reported was Rs597.00 Crore and net debt was Rs147.70 Crore.

Today, Nifty has support at 4,325 and resistance at 4,482 and BSE Sensex has support at 14,376 and resistance at 14,040.