Pre Session Commentary - Oct 6 2008

Today the Market would open negative as the major Asian markets have today opened with heavy blood bath. The sentiments across the Europe and Asia are weakening as investors are very concerned about the Credit crisis in Europe and US. Despite the House of Representatives accepting the bail out bill of $700 billion, investors are still apprehensive about the current financial crisis across the world. There seems to be a very chaotic state amongst the leading and emerging markets in the world which is likely to deteriorate the sentiments of the investors further.

On Friday, the market took a massive blood bath after the post mid session. The negative sentiment got transmitted from the Asian markets which were trading lower since opening. However after the poor opening of the European market the selling pressure became more intensive on the heavy stocks amidst concerns over the global meltdown. There are also apprehensions about the no effect of the bail out plan on the Indian market. But the bail out plan once accepted by the House of Representatives may bring a little charm across the other world markets and bring some positive sentiments. However in the domestic arena, sectors like Metal, Oil & Gas and Bankex were brutally shattered by 7.01%, 5.74% and 3.88% respectively. During the trading session we expect the market to trade in red.

The BSE Sensex closed at 12,526.32 registering a drastic fall of 529.35 points and NSE Nifty ended up by a fall of 132.45 points at 3,950.75. The BSE Mid Caps and Small Caps closed with loss of 146.36 points and 141.40 points at 4,677.80 and 5,465.40. The BSE Sensex touched intraday high of 13,001.19 and intraday low of 12,472.61.

On Friday, the US market closed as amended version of the bail out plan of $700 billion gave a negative outlook of the financial crisis in US. Many market participants are hoping that the Fed would reduce its interest rates in the next meeting. Further the Department of Labor announced that non-farm payrolls were down for the ninth consecutive month. They fell 159,000 in September, exceeding the drop of 105,000 that was widely anticipated. The investors are very concerned about the economic slowdown in US and therefore any negative cue from the government would crash the market in deep red. However in the banking arena the Wells Fargo and Wachovia Bank have agreed to merge through a stock-for-stock transaction valuing the latter’s shares at $7 a premium of nearly 80% on the prio closing price. And therefore the overall transaction is valued at $15.1 billion. Crude oil for November delivery fell by $1.90 to $91.98 per barrel on the New York Mercantile Exchange. The demand of crude oil is feared to fall down amidst the credit crisis. The Dollar is also gaining strength against Euro and other Asian markets thus making the other commodities weaker.

The Dow Jones Industrial Average (DJIA) was low by 157.15 points at 10,325.70 along with NASDAQ index which was low by 29.33 points at 1,947.39 and the S&P 500 (SPX) also declined by 15.04 points to close at 1,099.24 points.

Indian ADRs ended down. In technology sector, Wipro closed lower by (3.59%) followed by Satyam that ended down by (3.75%) and Patni Computers by (1.79%). In banking sector ICICI Bank gained (1.79%), while HDFC Bank lost (6.98%). In telecommunication sector, Tata Communication closed lower by (0.76%), while MTNL plunged (0.58%). Sterlite Industries decreased by (6.94%).

Today the major stock markets in Asia opened with a blood bath amidst concerns of credit crisis in Europe. The Hang Seng index is trading low by 498.16 points at 17,184.24 followed by Shanghai Composite which is low by 74.659 points and trading at 2,219.125. Further Japan''s Nikkei is low by 393.81 points at 10,544.33, Straits Times is also low by 58.86 points at 2,238.26.

The FIIs on Friday stood as net sellers in equity and net buyers in Debt. Gross equity purchased stood at Rs1969.80 Crore and gross debt purchased stood at Rs34.10 Crore, while the gross equity sold stood at Rs2254.00 Crore and gross debt sold stood at Rs0.00 Crore. Therefore, the net investment of equity and debt reported were (Rs284.20 Crore) and Rs34.10 Crore respectively.

The Wholesale Price Index (WPI) for the week ended September 20 recorded at 11.99% as against 12.14% in the previous week. This inflation figure has slowed more than expected to a 13-week low.

On Friday, the partially convertible rupee ended at 47.075/0850 per dollar, weakest since June 2, 2006. The sharp selling in the Capital markets has just added fuel to the depreciating Rupee by increasing the demand of the Dollar. The critical condition of the depreciating Rupee is also being dragged by the demand of Dollar from Oil companies, which pay nearly $8 billion per month for Crude oil imports.

On BSE, total number of shares traded were 24.31 crores and total turnover stood at Rs4,801.25 Crore. On NSE, total volumes of shares traded were 44.66 crores and total turnover was Rs11,891.76 Crore.

Top traded volumes on NSE Nifty – ICICI Bank with total volume of 13851673 shares followed by SAIL 12960180 shares, ITC 12116740 shares, Reliance 10688459 shares and Reliance Petro 9510548 shares.

On NSE Future and Options, total number of contracts traded in index futures was 783618 with a total turnover of Rs14096.21 Crore. Along with this total number of contracts traded in stock futures were 811517 with a total turnover of Rs12169.59 Crore. Total number of contracts for index options was 855589 and total turnover was Rs12169.59 Crore and total number of contracts for stock options was 74841 and notional turnover was Rs1157.88 Crore.

Today, Nifty would have a support at 3,695 and resistance at 3,875 and BSE Sensex has support at 12,150 and resistance at 12,650.