Pre Session Commentary - Oct 23 2008

Today Markets are likely to open with huge negative gap as the US markets nose dived into deep red yesterday and other Asian markets today opened with heavy blood bath. Yesterday’s loss in the markets has already spread a strong negative sentiment and therefore today’s worse market scenario across the world would further pulled down the domestic markets to new lows. The economic slowdown in US coupled with deteriorating markets in Asian and Europe testifies the fact that the pessimistic sentiments are prevailing across the world, which would last for a longer period of time.

On Wednesday, domestic Markets opened with a negative gap as Asian markets also opened with a blood bath and US markets had ended in red. Profit booking was witnessed in sectors like Realty and Metal that had gained momentum in the previous trading day. The carnage was further fuelled by the Nikkei (Japan) which was brutally shattered by 6.79% due to negative outlook of the earnings in the US. Except the FMCG sector all the other indices felt the heat of selling pressures. Metal, Realty, Bankex and Oil & Gas witnessed heavy profit booking and therefore tumbled by 7.90%, 7.57%, 5.78% and 5.56% respectively. In the metal index Tata Steel and Sterlite plummeted heavily by 12.04% and 10.04% respectively. During the trading session we expect the market to be in deep red.

The BSE Sensex closed lower by 513.49 points at 10,169.90 and NSE Nifty ended down by 169.75 points at 3,065.15. The BSE Mid Caps and Small Caps closed with losses of 96.85 points 3,490.39 and by 84.59 points at 4,111.69. The BSE Sensex touched intraday high of 10,484.85 and intraday low of 10,128.22.

On Wednesday, US markets nose dived into red on the back of negative outlooks of various companies. AT&T and Boeing missed the earning estimates showing signs of economic slowdown. On the other hand 56% of the majority of companies reported better than expected results; however the outlook of 39% companies very negative, 29% were in line, 24% mixed and only 7% were positive. The fundamental worries are yet to haunt the markets in US for a long period of time. Crude oil futures for the December delivery fell $5.43 to $66.75 a barrel on New York Mercantile Exchange, which is less than half of the $147 high seen in July. Oil tumbled to a 16-month low amid more evidence that the economic downturn was drying up energy demand. US Energy Information Administration informed that the country''s oil stocks jumped by 3.2 million barrels last week, above the expected increase of 2.9 million.
The Dow Jones Industrial Average (DJIA) closed lower by 514.45 points at 8,519.21. NASDAQ index lost 80.93 points at 1,615.75 and the S&P 500 (SPX) also fell by 58.27 points to close at 896.78 points.

Indian ADRs ended negative. In technology sector, Infosys slipped (4.52%) and Wipro lost by (7.75%) followed by Satyam that ended low by (4.84%) and Patni Computers closing low by (12.64%). In banking sector ICICI Bank was down by (15.20%), while HDFC Bank lost (9.61%). In telecommunication sector, Tata Communication declined by (10.28%), while MTNL was low by (6.45%). Sterlite Industries was down by (11.01%).

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Today the major stock markets in Asia opened negative. The Shanghai Composite is trading low by 53.09 points, at 1,842.73. Hang Seng is low by 799.83 points at 13,466.77. Further Japan''s Nikkei is low by 510.26 points at 8,164.43. Straits Times is trading is also trading low by 71.11 points at 1,750.02 and South Korea’s Seoul Composite is low by 94.65 points at 1,039.94.

The FIIs on Wednesday stood as net buyers in equity however in debt there was no trading. Gross equity purchased stood at Rs2725.60 Crore and gross debt purchased stood at Rs0.0 Crore, while the gross equity sold stood at Rs2611.80 Crore and gross debt sold stood at Rs0.0 Crore. Therefore, the net investment of equity and debt reported were Rs113.90 Crore and Rs0.0 Crore respectively.

On Wednesday, the partially convertible rupee ended at 49.28/29 per dollar, 0.15weaker than Tuesday''s close of 49.04/06. The rupee hit to level of 49.50 during the trading. Rupee slumped on heavy dollar sales by state-run banks and slide in domestic stock market.

On BSE, total number of shares traded was Rs. 21.21 Crore and total turnover stood at Rs. 3,095.17 Crore. On NSE, total volume of shares traded was Rs. 46.05 Crore and total turnover was Rs 8,733.63 Crore.

Top traded volumes on NSE Nifty – Reliance Petro with total traded volume of 13626942 shares, followed by ICICI with 11560559 shares, Idea Celluar with 10412416 shares, SAIL with 9879175 shares and ITC with 9025043 shares respectively.

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On NSE Future and Options, total numbers of contracts traded in index futures were 1092600 with a total turnover of Rs 16,063.48 Crore. Along with this total number of contracts traded in stock futures were 1025460 with a total turnover of Rs 12,379.68 Crore. Total numbers of contracts for index options were 1272509 and total turnover was Rs 21,086.72 Crore and total numbers of contracts for stock options were 35768 and notional turnover was Rs 516.96 Crore.

Today, Nifty would have a support at 2,815 and resistance at 2,925 and BSE Sensex has support at 9,445 and resistance at 9,815.