Pre Session Commentary - Oct 17 2008

Today Markets are likely to open positive as other markets around the world have shown some sign of bearish relief. On the domestic arena the selling pressure eased off on the second half session yesterday. Therefore today one can expect the market to be a little volatile amidst concerns of domestic as well as other market sentiments in Asia and Europe. The inflation too has eased off as wholesale price index reduced to 11.44% for the week ended 4th October 2008, as against the previous week''s 11.80% mainly due to cooling off global commodity prices. On the other hand despite the inflationary pressures RBI is infusing Rs.1,45,000 Crore to bring healthy liquidity conditions in the banking and financial sector. The domestic macro economic condition looks normal but the markets are very unpredictable as investors are very skeptic about the economic slowdown across the world and its recoupling effect on the domestic economy.

On Thursday, domestic Markets opened with heavy blood bath on the back of huge selling pressures; however after the post mid session it managed to rebound. The wide gap opening was well expected as the Asian markets had started the carnage with blood bath in the opening. The markets looked like a V shape trend after a dreadful opening in the morning. However in the second half the markets recovered swiftly on the back of short covering and value buying on some of the brutally shattered stocks. The sectors hit hard were Oil & Gas, CG, IT, Auto and Power that recorded fall of 5.57%, 5.23%, 3.99%, 3.43% and 2.24% respectively. During the trading session we expect the market to be trading volatile.

The BSE Sensex closed lower by 227.63 points at 10,581.19 and NSE Nifty ended down by 69.1 points at 3,369.3. The BSE Mid Caps and Small Caps closed with loss of 63.35 points at 3,657.13 and by 107.09 points at 4,286.36. The BSE Sensex touched intraday high of 10,787.2 and intraday low of 10,017.8.

On Thursday, US markets ended in green as the weekly jobless claims were lower than anticipated. Filings for jobless benefits declined 16,000 to 461,000, which was below the consensus 470,000 claims. However on the financial sector Citigroup and Merrill Lynch posted losses for the latest quarter. The industrial production for September decreased by 2.8%, the largest ever decline since 1974. However despite the good as well as bad news the US markets managed to end in green after a highly volatile trading session. Crude oil futures for the month of November delivery fell a barrel by $4.69 at $69.85 a barrel on New York Mercantile Exchange, lowest since 23rd August 2007. Oil dropped below $70 a barrel after the government reported massive increases in US crude and gasoline stockpiles.

The Dow Jones Industrial Average (DJIA) closed higher of 401.35 points at 8,979.26. NASDAQ index gained 89.38 points at 1,717.71 and the S&P 500 (SPX) also advanced by 38.59 points to close at 946.43 points.

Indian ADRs ended mixed. In technology sector, Wipro gained by (1.14%) followed by Satyam that ended low by (2.41%) and Patni Computers was low by (4.33%). In banking sector ICICI Bank was high by (3.85%), while HDFC Bank gained (11.76%). In telecommunication sector, Tata Communication inclined by (11.85%), while MTNL gained by (7.72%). Sterlite Industries gained by (7.32%).

Today the major stock markets in Asia opened mixed. The Shanghai Composite is trading high by 10.188 points, at 1,920.129. Hang Seng is also low by 80.39 points at 15,150.13. Further Japan''s Nikkei is high by 129.66 points at 8,588.11. Straits Times is trading is also trading low by 5.77 points at 1,945.43 and South Korea’s Seoul Composite is low by 17.56 points at 1,196.22.

The FIIs on Thursday stood as net sellers in equity and net buyers in debt. Gross equity purchased stood at Rs2041.80 Crore and gross debt purchased stood at Rs282.70 Crore, while the gross equity sold stood at Rs2882.50 Crore and gross debt sold stood at Rs204.40 Crore. Therefore, the net investment of equity and debt reported were (Rs840.70 Crore) and Rs 78.20 Crore respectively.

On Thursday, the partially convertible Indian Rupee ended at 48.82/83 per dollar weaker than Wednesday''s close of 48.52/54. In early deals it fell to low of 49.05 as losses in the domestic stock market raised concerns that FIIs would withdraw more funds.

On BSE, total number of shares traded was 29.52 crores and total turnover stood at Rs 4552.41 crores. On NSE, total volume of shares traded was 61.86 crores and total turnover was Rs 12397.5 crores.

Top traded volumes on NSE Nifty – ICICI bank with total traded volume of 21251234 shares, followed by Suzlon with 20563348 shares, Reliance Petro with 16467067 shares, Reliance Comm with 13520391 shares and ITC with 10897266 shares respectively.

On NSE Future and Options, total numbers of contracts traded in index futures were 1194841 with a total turnover of Rs18098.12 Crore. Along with this total number of contracts traded in stock futures were 1107650 with a total turnover of Rs13495.7 Crore. Total numbers of contracts for index options were 1332782 and total turnover was Rs23404.65 Crore and total numbers of contracts for stock options were 60627 and notional turnover was Rs894.25 Crore.

Today, Nifty would have a support at 3,215 and resistance at 3,430 and BSE Sensex has support at 10,450 and resistance at 11,150.