Pre Session Commentary - Sep 10 2008

The Indian Market is expected to have negative opening as US markets closed in deep red and Asian markets are trading lower. On Tuesday, domestic markets made a smart recovery to give up its earlier losses and closed off the day’s low but slightly in red. After a lower opening on unfavorable cues from Asian markets, markets continued to decline. Further, firm European markets triggered a sharp recovery in afternoon trade, lifting the market above dotted line. The market once again slipped into the red on fresh selling at higher level to finish with a modest loss. NSE Nifty ended below 4,500 mark and BSE Sensex around 14,900 level. From the sectoral front, most of the selling was visible in Metal, Bank, Reality, Capital Goods and Auto stocks. However, Oil & Gas stocks were in investor’s eye as witnesses most of the buying from this basket. The BSE Sensex closed lower by 44.21 points at 14,900.76 and NSE Nifty ended down by 13.60 points at 4,468.70. The BSE Mid Caps and Small Caps closed with cut of 41.69 points at 5,778.20 and by 18.19 points at 6,964.61. We expect that market may decline further during the trading session.

Crude oil fell in New York on Saudi Arabia''s oil minister statement that supplies are sufficient to meet demand, which raised speculation for OPEC to maintain production levels on its meeting in Vienna. Further, ministers of the Organization of Petroleum Exporting Countries agreed to keep output steady until mid-December. OPEC members agreed to cut excess production and left its production target unchanged at 28.8 million barrels a day after concluding its meeting in Vienna.

On Tuesday, the US market closed lower on housing and financial sector worries. The pending home sales data fell 3.2% also added to the market''s nervousness. Crude Oil for October delivery settled 2.9% lower, losing $3.08 to $103.26 a barrel on the New York Mercantile Exchange, its lowest close since 1st April

The Dow Jones Industrial Average (DJIA) closed lower by 280.01 points to close at 11,230.73 followed by the NASDAQ index ended down by 59.95 points to close at 2,209.81 and the S&P 500 (SPX) lost 43.28 points to close at 1,224.51.

Indian ADRs ended downward. In technology sector, Patni Computers ended lower by (4.62%) followed by Wipro plunged by (2.75%), Infosys dropped by (2.53%) and Satyam lost (2.30%). In banking sector HDFC Bank and ICICI Bank lost (7.61%) and (5.77%). In telecommunication sector, Tata Communication and MTNL fell by (3.25%) and (1.80%). Sterlite industries decreased by (16.23%).

Today the major stock markets in Asia are trading lower tracking Wall Street losses overnight. Hang Seng index is trading weaker by 435.31 points at 20,055.80 along with Japan’s Nikkei trading down by 131.11 points at 12,269.54 and Singapore''s Straits plunged 26.94 points at 2,646.27. However, Taiwan Weighted gained 50.51 points at 6,475.28.

The FIIs on Tuesday stood as net buyer in equity and in debt. Gross equity purchased stood at Rs3,356.40 Crore and gross debt purchased stood at Rs170.00 Crore while the gross equity sold stood at Rs2,598.40 Crore and gross debt sold stood at Rs162.80 Crore. Therefore, the net investment of equity reported was Rs758.10 Crore and net debt was Rs7.20 Crore.

The Indian rupee dropped to a fresh two year low on Tuesday. The partially convertible rupee ended at 44.84/85 per dollar, 0.5% weaker than 44.60/61 of Monday, but stronger than intraday low of 44.93, a level it last traded on November, 2006.

Today, Nifty has support at 4,354 and resistance at 4,536 and BSE Sensex has support at 14,432 and resistance at 15,156.