Pre Session Commentary - Oct 31 2008

Today a market is expected to have positive opening on mixed global cues. The US markets ended with gains and the Asian markets made are trading mixed. Inflation for the week ended 18th October 2008 eased with raising expectation that very soon it may come to single digit.

On Wednesday, domestic market reported marginal gains after showing volatility during the trading session. Market was unable to remain stable ahead of expiry of the Derivative contract of the October 2008 series. Domestic market opened appreciably upper on the back of favorable global markets. However the market was not able to continue the same momentum and pared its initial gains as investors preferred to book some profits. Market revealed sea-saw movement as it was not able to hold a particular territory. Most of the Asian stock markets reported profits on hopes that the Bank of Japan and the Federal Reserve will cut interest rates as a measure to encourage economic growth. BSE Sensex ended above 9,000 level and NSE Nifty above 2,600 mark. From the sectorial front, Metal, Oil & Gas, Auto and IT were in limelight as most of the buying witnessed from these baskets. However, Reality, Pharma, FMCG and Capital Goods stocks were major sufferers of negative sentiments. We expect that market may remain volatile during the trading session. Investors will also closely watch quarterly results from top companies.

The BSE Sensex closed higher by 36.43 points at 9,044.51 and NSE Nifty ended marginally up by 12.45 points at 2,697.05. The BSE Mid Caps and Small Caps closed with losses of 62.98 points 3,094.48 and by 37 points at 3,674.61. The BSE Sensex touched intraday high of 9,297.76 and intraday low of 8,894.34.

Inflation for the week ended 18th October 2008 came in at 10.68% as against 11.07% of previous week. It stood at 3.11 per cent in the year-ago period.

The US Federal Reserve cut its key lending rate a half point Wednesday to match a historic low of 1.0 percent in the latest action to ease a credit crisis that is strangling the US economy. The cut in the federal funds rate, which impacts a number of other borrowing rates, followed an emergency half-point cut October 8 coordinated with other central banks to help fight a worldwide credit crunch.

Thursday, the US stock market ended in green with last minute gains. Investors neglected disappointing GDP data that showed the economy is shrinking. US 3rd quarter GDP reduced to 0.3% as against growth of 2.8% in 2nd quarter; biggest decline since 2001. Crude oil futures for the December delivery fell $1.54 or 2.3% to $65.96 a barrel on New York Mercantile Exchange. Crude oil fell as uncertainty still surrounding the prospects for global oil demand.

The Dow Jones Industrial Average (DJIA) closed higher by 189.73 points at 9,180.69. NASDAQ index gained 41.31 points to 1,698.52 and the S&P 500 (SPX) surged 24 points to close at 954.09 points.

Indian ADRs ended up. In technology sector, Wipro ended higher by (7.78%) and Satyam gained (7.48%), Infosys ended up by (4.98%) and Patni Computers closed higher by (4.63%). In banking sector ICICI Bank was up by (13.64%) and HDFC Bank gained (11.38%). In telecommunication sector, MTNL inclined by (6.88%), and Tata Communication was up by (2.58%). Sterlite Industries increased by (9.24%).

Today major stock markets in Asia are trading mixed. Hang Seng is lower by 514.63 points at 13,805.22. Further Japan''s Nikkei plunged 245.64 points at 8,784.12 and Singapore''s Straits Times is also down marginally by 1.74 points at 1,800.17. The Taiwan Weighted surged 73.78 points at 4,757.42 and South Korea’s Seoul Composite gained 2.32 points at 1,087.04.

The FIIs on Wednesday stood as net seller in equity and in debt. Gross equity purchased stood at Rs1802.40 Crore and gross debt purchased stood at Rs57.10 Crore, while the gross equity sold stood at Rs2813.30 Crore and gross debt sold stood at Rs109.00 Crore. Therefore, the net investment of equity and debt reported were (Rs1010.90 Crore) and (Rs51.90 Crore) respectively.

On Wednesday, the partially convertible rupee ended at 49.69/70 per dollar, off a low of 49.95 and 0.4% stronger against Monday’s close of 49.87/88. India''s rupee strengthened on hopes gains in stock markets would help revive risk appetite

On BSE, total number of shares traded was 24.23 Crore and total turnover stood at Rs. 3,104.10 Crore. On NSE, total volume of shares traded was 75.32 Crore and total turnover was Rs 11,700.8 Crore.

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Top traded volumes on NSE Nifty – Unitech Ltd with total traded volume of 50487402 shares, followed by Hindalco with 48709734 shares, Suzlon Energy with 27886764 shares, RPL with 16507207 shares and Reliance Communications with 16304159 shares respectively.

On NSE Future and Options, total numbers of contracts traded in index futures were 1465660 with a total turnover of Rs.19,071.42 Crore. Along with this total number of contracts traded in stock futures were 16878.17 with a total turnover of Rs.17,258.73 Crore. Total numbers of contracts for index options were 1164671 and total turnover was Rs.17,532.61 Crore and total numbers of contracts for stock options were 28029 and notional turnover was Rs.360.48 Crore.

Today, Nifty would have a support at 2,629 and resistance at 2,774 and BSE Sensex has support at 8,756 and resistance at 9,372.

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