Pre Session Commentary - Oct 14 2008

Today Markets are likely to open positive as the other markets in Asia have also opened with big gap and the US markets closed up with epoch making numbers. The domestic markets had picked up a phenomenal rally yesterday, however today one could expect a moderate trend. Despite the FIIs pulling out huge amount of money from the markets yesterday, the domestic investors managed to keep the sentiments high. Now the bulls seem to be back on the track after the finance minister reiterated the healthy financial strength of the domestic economy. Further the US, European and other Asian markets too have created a congenial environment of positive sentiments by moving up trend.

On Monday, domestic Markets gained a phenomenal 781.24 points on the back huge recovery on the other Asian markets as well as positive cues from the domestic financial industry. The financial minister also reiterated the liquidity strength of domestic banking industry. There are also talks about some positive reforms in the SEBI guidelines for the FIIs with the Participatory notes issues. The green opening of European markets also helped the buoyant buying sentiments, hence over sentiments looked very positive across the broader markets and banking stocks were the fore runners. After brutal bash in the previous trading day, huge fresh buying was seen in Banking, CG, CD, Realty and Power indices that recorded remarkable gains of 12.30%, 9.93%, 9.39%, 9.16% and 8.71% respectively. During the trading session we expect the market to be trading with a moderate trend.

The BSE Sensex closed at 11,309.09 registering a heavy gain of 781.24 points and NSE Nifty fell by 210.75 points to close at 3,490.75. The BSE Mid Caps and Small Caps closed with loss of 154.58 points and 158.70 points at 3,830.58 and 4,514.15. The BSE Sensex touched intraday high of 11,361.32, and intraday low of 10,817.68.

On Monday, the US market surprised the whole world with astounding gains in its history of trading. S&P 500 posted largest one day percent gain since 1938 and Dow Jones posted largest one-day point gain ever, and largest percent gain since 1933. The Fed and other central banks have assured to inject unlimited liquidity into the system through short term lending. In Europe the Eurozone countries said they will guarantee new bank debt. Germany also guaranteed up to 400 billion euro in interbank lending and U.K. would inject up to 37 billion pounds in three U.K. banks. Crude oil for November delivery was up by $2.32 to $83.51 per barrel on the New York Mercantile Exchange. The recent government’ intervention by US government to support the economy came up as a sign of economic growth and hence sustained demand of crude oil.

The Dow Jones Industrial Average (DJIA) closed with a phenomenal gain of 936.42 points at 9387.61. However NASDAQ index gained 194.74 points at 1844.25 and the S&P 500 (SPX) also inclined by 104.13 points to close at 1003.35 points.

Indian ADRs ended with huge gains on the back of phenomenal rebound in the US markets. In technology sector, Wipro gained by (17.18%) followed by Satyam that ended high by (8.54%) and Patni Computers was high by (9.31%). In banking sector ICICI Bank increased by (39.67%), while HDFC Bank gained (29.96%). In telecommunication sector, Tata Communication inclined by (7.17%), while MTNL gained (19.13%). Sterlite Industries was also high by (18.09%).

Today the major stock markets in Asia opened positive with phenomenal gains. The Shanghai Composite is high by 25.168 points, trading at 2,099.75 and the Hang Seng is up by 588.51 points at 16,900.67. Further Japan''s Nikkei is leading the race of Bull Run by gaining a whopping 1,062.41 points at 9,338.84. Straits Times is trading high by 119.38 points at 2,195.73 and South Korea’s Seoul Composite is also high by 60.45 points at 1,348.98.

The FIIs on Monday stood as net sellers in equity and Debt. Gross equity purchased stood at Rs3959.00 Crore and gross debt purchased stood at Rs204.10 Crore, while the gross equity sold stood at Rs6282.20 Crore and gross debt sold stood at Rs956.20 Crore. Therefore, the net investment of equity and debt reported were (Rs2323.20 Crore) and (Rs752.10 Crore) respectively.

On Monday, the partially convertible Indian Rupee ended at 48.25 per dollar, 0.3% stronger than Friday''s close of 48.46. During the day, the rupee reached a high of 48. It reported increase following gains in stock market and finance minister''s statement.

On BSE, total number of shares traded were 29.41 crores and total turnover stood at Rs3,966.25 Crore. On NSE, total volumes of shares traded were 56.97 crores and total turnover was Rs11,562.62 Crore.

Top traded volumes on NSE Nifty – ICICI bank with total volume traded 30440007 shares, followed by Suzlon with 12414446 shares, ITC with 10914400 shares, Reliance Petro 9796636 shares and SAIL with 9137980 shares respectively.

On NSE Future and Options, total number of contracts traded in index futures was 837703 with a total turnover of Rs13646.29 Crore. Along with this total number of contracts traded in stock futures were 874749 with a total turnover of Rs10734.51 Crore. Total number of contracts for index options was 837986 and total turnover was Rs15614.64 Crore and total number of contracts for stock options was 44441 and notional turnover was Rs628.83 Crore.

Today, Nifty would have a support at 3,375 and resistance at 3,655 and BSE Sensex has support at 11,200 and resistance at 11,950.