Pre Session Commentary - Sep 26 2008

The Market is expected to have negative opening as Asian markets are trading lower along with negative news from the US markets about the failure of Washington Mutual Fund, which was acquired by JPMorgan Chase yesterday. JPMorgan Chase & Co. Inc. acquired the assets of Washington Mutual Inc.''s banking operations Thursday after federal regulators seized the ailing thrift. The deal will cost JPMorgan Chase $1.9 billion. Under the terms of the deal, J.P. Morgan acquired all of the deposits and assets of Washington Mutual and its subsidiary Washington Mutual FSB, valued at $307 billion in assets and $188 billion in deposits. Also, the talks about US governments’ financial sector bailout plan stalled in Washington.

On Thursday, the Indian markets closed in downbeat note on F&O expiry day for September. Markets also hit by concern over US governments’ $700 billion financial sector bailout plan. Domestic markets opened marginally higher but lost ground soon after start to trade below dotted line. Further, weakness continued to prevail over the markets on inflation worries. Though markets struggled to recover but profit booking led the markets to end the day in losses. BSE Sensex ended below 13,600 level and NSE Nifty closed below 4,150 mark. From the sectoral front, Metal, Reality, Oil & Gas, Capital Goods, IT and Pharma stocks contributed to most of the selling pressure. Mid Cap and Small Cap stocks also remained in bear grip. However, Auto stocks ended almost flat as witnessed some buying form its baskets. We expect that the market remain volatile during the trading session.

The BSE Sensex closed lower by 145.34 points at 13,547.18 and NSE Nifty ended down by 50.70 points at 4,110.55. The BSE Mid Caps and Small Caps closed with losses of 33.73 points at 5,093.05 and by 51.48 points at 6,050.03. The BSE Sensex touched intraday high of 13,716.88 and intraday low of 13,430.68.

Inflation for the week ended 13th September 2008, was remain unchanged at 12.14% at the same level recorded a week earlier. According to economists, inflation is stabilizing around this level before it starts to fall. Inflation remains unchanged even as the Finance Ministry said prices of essential items like cereals, pulses, sugar and edible oils declined on weekly basis.

September series of derivative contract expired on Thursday. The rollover was 62.56% in Nifty, which is lower than past three months average of 70.14%. In absolute terms also the rollover of 2.73 crore shares is much lower than the past three months average 3.21 crore shares.

On Thursday, the US market snapped a three day losing streak and closed in green as investors were confident of Congressional approval for bailout plan. Crude oil for November delivery raised $2.29 to $108.02 a barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed up by 196.89 points at 11,022.06 along with NASDAQ index closed higher by 30.89 points at 2,186.57 and the S&P 500 (SPX) gained 23.31 points to close at 1,209.18

Indian ADRs ended up. In technology sector, Wipro closed up by (5.39%) followed by Satyam by (3.20%), Infosys ended higher by (1.66%) and Patni Computers by (0.59%). In banking sector HDFC Bank gained (0.72%), while ICICI Bank lost (1.12%). In telecommunication sector, Tata Communication and MTNL surged (16.94%) and (4.96%). Sterlite Industries increased by (1.57%).






Today the major stock markets in Asia are trading lower despite gains on Wall Street overnight, over the uncertainty as there are deep divisions between Democrats and Republicans in US about the Bush Administration''s $700 billion rescue plan for the financial sector. Hang Seng index is trading down by 187.27 points at 18,747.16. Followed by, Taiwan Weighted dropped by 132.56 points at 5,928.27, Japan''s Nikkei slipped 23.19 points at 11,983.34 and Singapore''s Straits trading at 2,422.92 plunged 21.32 points.

The FIIs on Thursday stood as net seller in equity and net buyer in debt. Gross equity purchased stood at Rs3,505.60 Crore and gross debt purchased stood at Rs258.60 Crore while the gross equity sold stood at Rs3,680.00 Crore and gross debt sold stood at Rs116.80 Crore. Therefore, the net investment of equity reported was (Rs174.40) Crore and net debt was Rs141.90 Crore.

The BSE and NSE trading will remain suspend between 11.25 IST and 12.10 IST due to the sun outage. The day’s session ended at 16.15 IST. The new trading timing is effective till 8 October 2008.

On Thursday, the partially convertible rupee closed to its lowest in a week as loss in stock market fueled concern for capital outflow and due to the two-day nationwide strike by bank unions. Indian rupee ended at 46.21/22 per dollar, 0.5% weaker than 45.95/96 at close on Wednesday. It fell to the low of 46.30 during the trade.

On BSE, total number of shares traded was 22.49 crores and total turnover stood at Rs5070.61 crores. On NSE, total volume of shares traded was 61.37 crores and total turnover was Rs 15311.01 crores.

Top traded volumes on NSE Nifty – Suzlon Energy with total volume traded 14417116, followed by NTPC with 12831889, Reliance Petro with 12829529, ICICI Bank with 12103191 and Reliance Power with 10740865.

On NSE Future and Options, total number of contracts traded in index futures was 1159748 with a total turnover for the same was Rs 22788.38 crores. Along with this total number of contracts traded in stock futures was 1686501 with a total turnover of Rs 27584.52 crores. Total number of contract for index options was 1467767 and total turnover was Rs 3119.09 crores and total number of contracts for stock options was 66583 and notional turnover was Rs 1205.7 crores.

Today, Nifty has support at 4,008 and resistance at 4,199 and BSE Sensex has support at 13,162 and resistance at 13,859.