Pre Session Commentary - Oct 10 2008

Today markets is likely to open with a heavy blood bath, as majority of Asian markets have been butchered during the opening and are still trading in deep red. The US markets were the ones that showed huge selling and negative sentiments, which are now followed by the other Asian markets. Domestic news have very little to play with the markets’ numbers because all the markets around the world are now exuding a linear movement. Therefore, one could expect the domestic markets to be highly volatile amidst negative sentiments in other markets. The inflation data to come today would also have a very little impact on the markets.

On Wednesday, domestic Markets opened with a blood bath on the back of poor sentiments across the world indices. The Asian markets opened negative on the back of the blood bath that happened in US markets a day before. Simultaneously the domestic markets crashed badly with heavy losses in the opening. Terrible sell of was seen on FMCG, Technology, Banking and Capital Goods indices. However during the post mid session the markets recovered phenomenal as Sensex and Nifty recovered 587.6 points and 184.2 points. CD, FMCG, IT and Bankex recorded fall of 6.75%, 5.18%, 4.90% and 4.42% respectively. During the trading session we expect the market to be trading in deep red.

The BSE Sensex closed at 11,328.36 registering a marginal fall of 366.88 points and NSE Nifty fell by 92.95 points to close at 3,513.65. The BSE Mid Caps and Small Caps closed with loss of 246.68 points and 277.20 points at 4,010.48 and 4,699.19. The BSE Sensex touched intraday high of 11405.73, and intraday low of 10,740.76.

On Thursday, the US market faced a heavy loss due to huge selling pressures across all markets. The Short Selling ban was lifted so to allow more trade. The ban was originally limited to 799 financial stocks and later it also included some non financial companies. However after the consequent rate cut off by majority of European and Asian countries, the investors in the US market were skeptic about their economy’s sustainability. The selling pressures therefore pulled the markets to new lows. Crude oil for November delivery fell by $2.05 to $86.90 per barrel on the New York Mercantile Exchange. The investors are optimistic about the economic slowdown across the world, hence anticipated fall in the demand of Crude oil. The OPEC has also called an emergency meeting on November 18 to chalk out plans to cut the production so to keep the Crude oil prices stable.

The Dow Jones Industrial Average (DJIA) was low by 678.91 points at 8579.19, along with NASDAQ index which was low by 95.21 points at 1,645.12 and the S&P 500 (SPX) also declined by 75.02 points to close at 909.92 points.

Indian ADRs ended down. In technology sector, Wipro closed lower by (3.93%) followed by Satyam that ended down by (2%) and Patni Computers by (2.19%). In banking sector ICICI Bank fell by (7.41%), while HDFC Bank lost (1.31%). In telecommunication sector, Tata Communication fell by (10.36%), while MTNL plunged (5.40%). Sterlite Industries fell by (10.23%).

Today the major stock markets in Asia opened with heavy blood bath amidst concerns of weak sentiments in US and other markets. The Shanghai Composite is low by 82.38 points and trading at 1,992.201. Further Japan''s Nikkei is low by 841.19 points at 8,316.30, Straits Times is also low by 141.05 points at 1,961.66 and South Korea’s Seoul Composite was low by 93.74 points at 1,201.15.

The FIIs on Wednesday stood as net sellers in equity and net buyers in Debt. Gross equity purchased stood at Rs2797.60 Crore and gross debt purchased stood at Rs149.30 Crore, while the gross equity sold stood at Rs3345.70 Crore and gross debt sold stood at Rs59.50 Crore. Therefore, the net investment of equity and debt reported were (Rs548.10 Crore) and Rs89.80 Crore respectively.

On Wednesday, the partially convertible rupee ended at 47.90/92 per dollar after it touched a low of 48.815 weakest in Six years. The currency regained after the announcement came from US federal that it would reduce its fund and discount rates by 50bps each. Further the European Central Bank, Bank of England and the Swiss, Canadian and Swedish central banks all cut rates to save the global meltdown.

On BSE, total number of shares traded were 32.79 crores and total turnover stood at Rs5,135.12 Crore. On NSE, total volumes of shares traded were 61.69 crores and total turnover was Rs12,819.42 Crore.

Top traded volumes on NSE Nifty – Suzlon Energy with total volume of 19460883 shares followed by ICICI Bank 14595573 shares, Reliance Petro 14272697, NTPC 11691525 shares and ITC 11219288 shares.

On NSE Future and Options, total number of contracts traded in index futures was 1328407 with a total turnover of Rs21611.06 Crore. Along with this total number of contracts traded in stock futures were 1036858 with a total turnover of Rs13638.43 Crore. Total number of contracts for index options was 1135148 and total turnover was Rs21642.91 Crore and total number of contracts for stock options was 49733 and notional turnover was Rs774.56 Crore.

Today, Nifty would have a support at 3,250 and resistance at 3,675 and BSE Sensex has support at 10,550 and resistance at 11,350.