Pre Session Commentary - Oct 22 2008

Today markets are likely to open negative as there are negative cues coming from the US and other Asian markets. After yesterday’s strong trend, today one could witness some selling pressures on the back of weak sentiments and negative cues from other markets. There is no other news in the domestic macro economic front which could affect the market sentiments. Therefore domestic markets are likely to follow the trend of Asian and European markets. Since Asian markets opened with a blood bath one could expect the domestic markets to open with a negative gap. Short selling pressures could hack the markets further.

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On Tuesday, domestic markets opened positive as the investors very receptive to the positive assertions made by our Honourable Prime Minister Dr. Manmohan singh day before yesterday. Further the other Asian markets also exuded signs of positive sentiments which helped the domestic markets close in green. After the opening there was some volatility in the trading, however in the later trading session sectors like Realty, CD and IT added buoyancy in the markets. Realty bourses have had suffered brutal hack in the previous trading days, therefore today it witnessed some value buying. In Consumer Durables sector, Titan was the top gainer with a phenomenal gain of 17.39%. However in Realty and IT, IndiaBull Realty and TCS were the fore runners with staggering gains of 27.65% and 12.86% respectively. During the trading session we expect the market to be trading with a negative gap.
The BSE Sensex closed higher by 460.30 points at 10,683.39 and NSE Nifty ended up by 112.1 points at 3,234.90. The BSE Mid Caps and Small Caps closed with gains of 80.89 points at 3,587.24 and by 83.46 points at 4,196.28. The BSE Sensex touched intraday high of 10,750.20 and intraday low of 10,250.23.

On Tuesday, US markets tumbled on the back of cautious sentiments on the credit markets and the mixed results coming from several companies. On the other hand the credit markets are showing some improvement and the Fed is also buying commercial papers from the mutual funds in an effort to inject more liquidity in the markets. But the investors are still skeptic about the current economic scenario. Some companies that top the quarterly results were 3M, American Express, DuPont and Pfizer, however Blackrock, Caterpillar and Texas instruments missed the estimates. Crude oil futures for the month of November delivery fell $3.36 to $70.89 a barrel on New York Mercantile Exchange after touching the low of $69.77 a barrel. Oil tumbled below $71 as a stronger dollar hurt investor demand for commodities and outweighed concerns about an expected cut in OPEC output. The November contract expired at the close of trading Tuesday. Crude oil fof December delivery fell $2.21, to close at $72.18 a barrel.

The Dow Jones Industrial Average (DJIA) closed lower by 231.77 points at 9,033.66. NASDAQ index lost 73.35 points at 1,696.68 and the S&P 500 (SPX) also decreased by 30.35 points to close at 955.05 points.

Indian ADRs ended negative. In technology sector, Infosys slipped (5.2%) and Wipro lost by (1.63%) followed by Satyam that ended low by (3.83%) and Patni Computers closing low by (4.19%). In banking sector ICICI Bank was down by (2.87%), while HDFC Bank lost (4.14%). In telecommunication sector, Tata Communication declined by (4.32%), while MTNL was low by (6.05%). Sterlite Industries was down by (3.48%).

Today the major stock markets in Asia opened negative. The Shanghai Composite is trading low by 19.35 points, at 1,939.18. Hang Seng is low by 361.19 points at 14,685.36. Further Japan''s Nikkei is low by 368.94 points at 8,937.31. Straits Times is trading is also trading low by 62.62 points at 1,862.55 and South Korea’s Seoul Composite is low by 33.59 points at 1,162.58.

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The FIIs on Tuesday stood as net sellers in equity and in debt. Gross equity purchased stood at Rs1870.20 Crore and gross debt purchased stood at Rs0.0 Crore, while the gross equity sold stood at Rs2710.30 Crore and gross debt sold stood at Rs227.70 Crore. Therefore, the net investment of equity and debt reported were (Rs840.10 Crore) and (Rs227.70 Crore) respectively.

On Tuesday, the partially convertible rupee ended at 49.04/06 per dollar, 0.1% weaker than Monday''s close of 48.97/98. The rupee fell to level of 49.15 during the trading. Rupee ended down as central bank strike hit volumes and due to dollar demand from importers.

On BSE, total number of shares traded was Rs. 26.46 crores and total turnover stood at Rs. 3,882.49 crores. On NSE, total volume of shares traded was Rs. 55.61 crores and total turnover was Rs 11,076.44 crores.

Top traded volumes on NSE Nifty – Reliance Petro with total traded volume of 20428352 shares, followed by ICICI with 13856773 shares, Idea Celluar with 13665405 shares, Suzlon with 12492181 shares and Unitech with 12099881 shares respectively.

On NSE Future and Options, total numbers of contracts traded in index futures were 1085573 with a total turnover of Rs 16375.17 Crore. Along with this total number of contracts traded in stock futures were 1093114 with a total turnover of Rs 13114.71 Crore. Total numbers of contracts for index options were 1163074 and total turnover was Rs 19682.64 Crore and total numbers of contracts for stock options were 49272 and notional turnover was Rs 672.53 Crore.

Today, Nifty would have a support at 3,085 and resistance at 3,205 and BSE Sensex has support at 10,025 and resistance at 10,495.