Pre Session Commentary - Sep 23 2008

The Market is expected to have negative opening due to weak cues from the global markets as US markets closed in red and Asian markets are trading weak along with rise in crude. On Monday, the Indian markets pared its initial gains to end the day in red zone as investors booked profits during the session on financial concern for global economy. Domestic markets ignored positive cues from Asian markets. Markets opened with gains on positive cues from US markets as US government had proposed a $700billion plan to handle world’s financial crises. The US Federal Reserve on Sunday announced that US investment banks Goldman Sachs and Morgan Stanley will become bank holding companies and will receive new US government credit. Further, market started losing after mid session to close almost flat. From the sectoral front, most of the indices closed with losses and among those Capital Goods, Oil & Gas, Auto and Power stocks were major contributors of selling pressure. However, Metal and FMCG stocks were in limelight as witnessed most of the buying from these baskets. We expect that the market may lose some ground during the trading session.

The BSE Sensex closed lower by 47.36 points at 13,994.96 and NSE Nifty fell by 10.9 points to close at 4,234.35. The BSE Mid Caps and Small Caps closed lower by 7.82 points and 21.88 points at 5,220.96 and 6,194.44. The BSE Sensex touched intraday high of 14,221.04 and intraday low of 13,917.48.

On Monday, the US market dropped after news that the two remaining major Wall Street investment banks Goldman Sachs and Morgan Stanley, converted to a traditional banking structure along with uncertainty on the details regarding the U.S. government’s $700 billion plan to fix the financial market turmoil. Crude oil prices also put fire into the markets as reported biggest one-day gain and jumped by $16.37 to $120.92 a barrel after touching an intraday high of $130 a barrel, on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed down by 372.75 points at 11,015.69 followed by the NASDAQ index closed lower by 94.92 points at 2,178.98 and the S&P 500 (SPX) dropped by 47.99 points to close at 1,207.09.

Indian ADRs ended with losses. In technology sector, Wipro closed down by (11.19%) followed by Patni Computers by (8.25%), Infosys by (4.05%) and Satyam by (3.59%). In banking sector ICICI Bank and HDFC Bank lost (7.32%) and (4.37%). In telecommunication sector, Tata Communication and MTNL dropped by (1.01%) and (0.73%). Sterlite Industries plunged (1.79%).

Today the major stock markets in Asia are trading weak. Japanese financial markets shut today on account of Autumnal Equinox Day, a national holiday. Hang Seng index is trading down by 429.51 points at 19,202.69 along with Taiwan Weighted trading at 6,097 plunged 12.72 points and Singapore''s Straits fell 47.78 points at 2,496.35.

The FIIs on Monday stood as net buyer in equity and in debt. Gross equity purchased stood at Rs6,826.80 Crore and gross debt purchased stood at Rs1432.00 Crore while the gross equity sold stood at Rs5,658.30 Crore and gross debt sold stood at Rs466.20 Crore. Therefore, the net investment of equity reported was Rs1,167.90 Crore and net debt was Rs905.80 Crore.

On Monday, the Indian rupee appreciated by 0.8% and ended at 45.44/45 per dollar than Friday’s close of 45.83. Earlier it hit a high of 45.22/23 in early trade. The Indian currency climbed to the highest in more than a week after the U.S. Treasury proposed buying as much as $700 billion in financial assets to clean up banks'' balance sheets

Today, Nifty has support at 4,106 and resistance at 4,310 and BSE Sensex has support at 13,489 and resistance at 14,284.