Pre Session Commentary - Sep 4 2008

The Indian Market is expected to have negative opening as US markets ended mixed and Asian markets are trading down. On Tuesday, domestic market closed with handsome gains on steep drop in crude oil after early reports that showed Hurricane Gustav had spared major U.S. Gulf oil facilities. Market opened with gains on eased crude. Further domestic market continued to gain ground on significant buying across the ground. The market extended its strength and rallied sharply after mid session to conclude the day with heavy gains. Firm cues from the European markets also lifted the sentiments. BSE Sensex regained 15,000 mark and NSE Nifty crossed 4,500 level. From the sectoral front, all indices closed in green and Reality and Bank stocks closed with gains of more than 7% and 6%. Along with that, major gainers were Capital Goods, Oil & Gas, Metal and IT stocks as witnessed most of the buying from these baskets. The BSE Sensex closed higher by 551.35 points at 15,049.86 and NSE Nifty ended up by 155.35 points at 4,504.00. The BSE Mid Caps and Small Caps ended with gains of 95.03 points and 91.00 points at 5,837.01 and 6,982.39. We expect that market may remain volatile during the trading session ahead of inflation number for the week ended 23rd August 2008, due to be released today evening.

Despite fears of an economic slowdown in India, direct tax collections have gone up by 38.3% in the first five months of the current fiscal at Rs 84,409 crore, compared to Rs 61,030 crore in a year-ago period. The corporate taxes rose by 43.49% to Rs 48,450 crore, against Rs 33,766 crore, while Personal Income Tax (including FBT, STT and BCTT) grew by 31.79% to Rs 35,840 crore. Amid volatility in stock markets, securities transaction tax registered a 15.10% growth at Rs 2,730 crore during the period.

On Wednesday, the US market closed mixed on economic worries. Crude oil prices were slightly lower due to stronger dollar. Light, sweet crude for October delivery fell to settle at $109.35 a barrel on the New York Mercantile Exchange, after earlier dipping as low as $107.22.

The Dow Jones Industrial Average (DJIA) closed higher by 15.96 points to close at 11,532.while the NASDAQ index ended down by 15.51 points to close at 2,333.73 and the S&P 500 (SPX) lost 2.60 points to close at 1,274.98.

Indian ADRs ended down. In technology sector, Wipro ended lower by (2.92%) followed by Satyam dropped by (2.39%), and Infosys by (1.22%) while Patni Computers gained (0.28%). In banking sector ICICI Bank and HDFC Bank lost (0.70%) and (0.25%). In telecommunication sector, Tata Communication ended up by (2.34%) while MTNL dropped by (1.72%). However, Sterlite industries decreased by (0.65%).

Today the major stock markets in Asia are trading weak. Taiwan Weighted is trading lower by 80.50 points at 6,504.43 along with Japan’s Nikkei trading down by 45.37 points at 12,644.22, Singapore''s Straits Times dropped by 40.52 points at 2,666.01 and Hang Seng index lost 31.44 points at 20,553.62.

The FIIs on Tuesday stood as net seller in equity and in debt.30 Gross equity purchased stood at Rs1348.30 Crore and gross debt purchased stood at Rs91.30 Crore while the gross equity sold stood at Rs1,520.50 Crore and gross debt sold stood at Rs147.70 Crore. Therefore, the net investment of equity reported was (Rs171.70) Crore and net debt was (Rs56.40) Crore.

The Indian rupee declined by 25 paise against the greenback in volatile trade on Tuesday due to huge demand for dollar from foreign banks and oil companies. The partially convertible rupee closed at 43.38/44.44 per dollar, down from Monday''s close of 44.18/19.

Today, Nifty has support at 4,406 and resistance at 4,572 and BSE Sensex has support at 14,738 and resistance at 15,326