Pre Session Commentary - Aug 5 2008

The Indian Market is expected to have negative opening due to weak global cues ahead of Federal Reserve meeting to decide on US interest rates today. On Monday, the Indian market broke its three days upward movement and ended with losses. The domestic market opened on negative note and soon turned volatile. Further market tried to recover during mid session but was not able to gather the momentum and remained unstable till end to close in red. BSE Sensex ended below 14,600 mark and NSE Nifty below 4,400 level. BSE Midcaps and Smallcaps maintained their opening gains and ended with increase of more than 1.5%. From the sectoral front, Capital Goods, Oil & Gas and Power stocks remained out of favor as witnessed most of the selling pressure from these baskets. However, Metal, Consumer Durables, Pharma and Bank stocks were in the limelight as contributed to the significant buying. The BSE Sensex closed lower by 78.82 points at 14,577.87 and NSE Nifty ended down by 18.20 points at 4,395.35. We expect that market may remain volatile during the trading session.

On Monday, the US market was closed in red. Oil prices dropped to 16% below the record price set in early July. Crude oil dropped by $3.69 to close at $121.41 a barrel on the NYMEX.

The Dow Jones Industrial Average (DJIA) closed lower by 42.17 points at 11,284.15 along with NASDAQ ended down by 25.40 points at 2,285.56 and S&P 500 index closed lower by 11.30 points at 1,249.01.

Indian ADRs ended down. In technology sector, Wipro ended lower by (5.42%) along with Infosys by (2.15%) and Satyam by (1.57%) while Patni Computers advanced by (0.09%). In banking sector, HDFC bank gained (0.11%) while ICICI bank dropped by (3.45%). In telecommunication sector, MTNL ended up by (0.98%) while Tata Communication lost (3.65%). Sterlite Industries decreased by (5.78%).

Today the major stock markets in Asia are trading weak. Hang Seng index is trading down by 362.23 points at 22,152.69 along with Taiwan Weighted is trading at 6,848.16 down by 129.20 points. However, Japan''s Nikkei rose 34.85 points at 12,968.03.

The FIIs on Monday stood as net seller in equity. The gross equity purchased was Rs2,889.70 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs3,231.90 Crore and gross debt sold stood at Rs0.00 Crore. Therefore, the net investment of equity reported was (Rs342.20) Crore and net debt was Rs0.00 Crore.

Today, Nifty has support at 4,306 and resistance at 4,466 and BSE Sensex has support at 14,232 and resistance at 14,862.