Pre Session Commentary - Oct 16 2008

Today Markets are likely to open with negative gap as the US markets closed in deep red and other Asian markets have also opened with blood bath. The domestic financial industry is likely to get a cushion against the foreign economic meltdown as RBI has further reduced the CRR by 100bps to 6.50%. The RBI is all set to lend a whopping Rs.250 billion into the banking sector so as to provide enough liquidity in the system. However today except the banking sector other sectors are likely to face huge selling pressure amidst global meltdown concerns.

On Wednesday, domestic Markets opened with heavy blood bath on the back of huge selling pressures that started since the previous post mid session trading. The Asian markets started the carnage as majority of Asian indices except Nikkei open with blood bath. This negative sentiment poured oil to the burning bearish sentiment in the domestic markets. The investors were very skeptic about any base or support level of the market and hence the insecurity felling led heavy selling pressures. The sectors that got ablaze were CG, CD, Metal, Teck and Power that recorded fall of 8.88%, 8.79%, 7.82%, 6.03% and 6.02% respectively. During the trading session we expect the market to be trading in deep red.

The BSE Sensex closed lower by 674.28 points at 10,809.12 and NSE Nifty ended down by 180.25 points at 3,338.40. The BSE Mid Caps and Small Caps closed with losses of 171.55 points at 3,720.48 and by 222.44 points at 4,393.45. The BSE Sensex touched intraday high of 11,257.15 and intraday low of 10,760.33.

On Wednesday, US markets got butchered on the back of weak economic concerns. The Retail sales in US plummeted by 1.2%, the lowest in three years time. Further Fed Chairman Ben Bernake ad the release of Fed’s Beige Book brought negative sentiments with assertions that the recovery from the present scenario would take time. The energy sector was hit the hardest due to concerns of fall in demand. The good quarterly numbers of many companies could not save the market from the downfall, which shows cues of inevitable bearish and cautious sentiments. Crude oil futures for the month of November delivery fell a barrel by $4.09 at $74.54 a barrel on New York Mercantile Exchange, lowest since 5th September 2007. Oil dropped below $ 75 a barrel as OPEC reduced its 2009 petroleum demand forecast in the course of signs that the global economy is headed for a severe downturn

The Dow Jones Industrial Average (DJIA) closed with a fall of 733.08 points at 8577.91. NASDAQ index fell by 150.68 points at 1628.33 and the S&P 500 (SPX) also declined by 90.17 points to close at 907.84 points.

Indian ADRs ended with blood bath. In technology sector, Wipro fell by (11.54%) followed by Satyam that ended low by (5.21%) and Patni Computers was low by (5.21%). In banking sector ICICI Bank was low by (9.69%), while HDFC Bank fell (14.19%). In telecommunication sector, Tata Communication declined by (10.32%), while MTNL fell by (13.21%). Sterlite Industries had fallen the most by (16.85%).

Today the major stock markets in Asia opened negative. The Shanghai Composite is low by 79.366 points, trading at 1,915.301. Hang Seng is also low by 1207.44 points at 14,790.86. Further Japan''s Nikkei is low by 911.91 points at 8,635.56. Straits Times is trading is also trading low by 132.26 points at 1,927.13 and South Korea’s Seoul Composite is low by 92.79 points at 1,247.49.

The FIIs on Wednesday stood as net sellers in equity and net buyers in debt. Gross equity purchased stood at Rs3789.3 Crore and gross debt purchased stood at Rs95.3 Crore, while the gross equity sold stood at Rs3978.4 Crore and gross debt sold stood at Rs0.0 Crore. Therefore, the net investment of equity and debt reported were (Rs189.1 Crore) and Rs95.3 Crore respectively.

On Wednesday, the partially convertible Indian Rupee ended at 48.525/540 per dollar weaker than 48.04/06 on Tuesday’s closing. The Rupee fell on the back of falling stock markets across the world and also apprehensions of the offshore Dollar demand. The RBI is selling Dollars in the market to help resist the further rise in Rupee Dollar exchange rate.

On BSE, total number of shares traded were 22.26 crores and total turnover stood at Rs3,581.21. On NSE, total volumes of shares traded were 45.35 crores and total turnover was Rs9,748.04 Crore.

Top traded volumes on NSE Nifty – ICICI bank with total traded volume of 10262551 shares, followed by ITC with 9602501 shares, Reliance Comm with 9090589 shares, SAIL with 8634820 shares and Reliance Petro with 8188876 shares respectively.

On NSE Future and Options, total numbers of contracts traded in index futures were 862941 with a total turnover of Rs13767.49 Crore. Along with this total number of contracts traded in stock futures were 800400 with a total turnover of Rs10227.85 Crore. Total numbers of contracts for index options were 1063789 and total turnover was Rs19371.11 Crore and total numbers of contracts for stock options were 43442 and notional turnover was Rs629.64 Crore.

Today, Nifty would have a support at 3,125 and resistance at 3,320 and BSE Sensex has support at 10,200 and resistance at 10,675.