Pre Session Commentary - Oct 13 2008

Today Markets are likely to open positive as the markets have already shed enough after heavy blood bath on Friday. One can expect some value buying today but the sentiments would still be negative amidst concerns of financial crisis across the world. The Asian markets have also opened mixed as some indexes are showing some rebound. In the domestic arena there is not much good news to support the markets; however the relief of bearishness in the global markets would cool down the bears in the domestic markets too. The inflation too has declined by 19bps to 11.80% from 11.99%.

On Friday, domestic Markets were butchered ruthlessly on the back of negative cues from the US and Asian Markets. After a heavy blood bath session of the opening the markets recovered some points as RBI announced the 150bps cut off on the CRR through which it would pump Rs.60,000 crore in the banking industry. However after the IIP numbers came up the markets dwindle into deep red territory showing no sign of recovery. The IIP numbers for the month of August was at 1.3% versus 10.9% (YoY). There was also news from the EAC member about the decelerating and industrial recession. Terrible selling was seen on Realty, CD, Metal and CG indices recording fall of 11.30%, 10.11%, 9.25% and 9.22% respectively. During the trading session we expect the market to be trading range bound.

The BSE Sensex closed at 10,527.85 registering a heavy fall of 800.51 points and NSE Nifty fell by 233.7 points to close at 3,513.65. The BSE Mid Caps and Small Caps closed with loss of 334.48 points and 343.74 points at 3,676.00 and 4,355.45. The BSE Sensex touched intraday high of 10,904.13, and intraday low of 10,239.76.

On Friday, the US market closed mixed after a volatile session trading. The economic news was not good as GE posted a 10 year low quarter earnings of $0.47 per share. Further out of ten economic sectors, eight sectors reported losses. The weak credit markets and a very high sense of uncertainty kept the markets in volatility. Goldman Sachs and Morgan Stanley suffered some burns after Moddy’s reviewed their credit rating with a downgrade. 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 128 points at 8451.19, However NASDAQ index managed to close in green with a gain of 4.39 points at 11649.51 and the S&P 500 (SPX) also declined by 10.70 points to close at 899.22 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 mixed. The Shanghai Composite is low by 68.32 points and trading at 1,931.75. Further Japan''s Nikkei is low by 881.06 points at 8,276.43, however Straits Times is trading high by 24.39 points at 1,972.72 and South Korea’s Seoul Composite is also high by 30.17 points at 1,271.64.

The FIIs on Friday stood as net sellers in equity and Debt. Gross equity purchased stood at Rs3016.70 Crore and gross debt purchased stood at Rs58.10 Crore, while the gross equity sold stood at Rs3864.40 Crore and gross debt sold stood at Rs241.10 Crore. Therefore, the net investment of equity and debt reported were (Rs847.70 Crore) and (Rs182.90 Crore) respectively.

On Friday, the partially convertible rupee ended at 48.38/43 per dollar after it touched a life time low of 49.30 per dollar. The rupee is anticipated to touch Rs.50/ dollar in another one month time. The RBI on the other hand is pumping Rs.60,000 Crore through the CRR cut by 150bps so as to bring some liquidity in the market. The RBI was also selling dollar though commercial banks to give the rupee some level of support from intense falling.

On BSE, total number of shares traded were 32.10 crores and total turnover stood at Rs5,107.30 Crore. On NSE, total volumes of shares traded were 64.59 crores and total turnover was Rs14,743.54 Crore.


On NSE Future and Options, total number of contracts traded in index futures was 1150335 with a total turnover of Rs17921.64 Crore. Along with this total number of contracts traded in stock futures were 1011762 with a total turnover of Rs12326.98 Crore. Total number of contracts for index options was 920958 and total turnover was Rs17337 Crore and total number of contracts for stock options was 47869 and notional turnover was Rs693.62 Crore.

Today, Nifty would have a support at 3,300 and resistance at 3,590 and BSE Sensex has support at 10,450 and resistance at 11,150.