Pre Session Commentary - Oct 8 2008

Today Markets would open negative amidst concerns over weak US market and falling Asian Markets. After yesterday’s volatile session, one could gauge the weak sentiment of bulls that was further slaughtered by the bears in the later trading sessions. The market is absolutely in tight control of bears as there is no sign of relief coming from the macro economic front. The Mutual fund houses and FIIs are pulling out their funds and even the insurance companies are facing tough business. The investors are very skeptic about strength of the markets and hence fresh capital inflow is locked. One could only wait any good news coming from the SEBI with regard to the P-Notes. The markets seem to be caught in the tight claw of fury of the bears.

On Tuesday, domestic Markets opened positive with phenomenal recovery but couldn’t sustain the selling pressure and later ended mixed. At the end Sensex closed in red with a marginal loss of 106 points however Nifty managed to grip the green zone. The market sustained on the back of good news in the form of 50bps CRR cut by RBI. However, the selling pressure whacked out the stocks of CG, IT and Bankex after an early pick in the morning session. Asian markets and European markets also traded mixed and showed marginal movements. CG, IT, Bankex and Realty recorded fall of 3.96%, 3.04%, 2.15% and 1.94% respectively. Whereas Oil & Gas index performed well with a gain of 1.30% due to softening in the crude oil prices by $4.42 per barrel to $87.56 in New York Mercantile Exchange. During the trading session we expect the market to be trading in red.

The BSE Sensex closed at 11,695.24 registering a marginal fall of 106.46 points and NSE Nifty ended flat at 3,606.60. The BSE Mid Caps and Small Caps closed with loss of 87.07 points and 110.54 points at 4,257.16 and 4,976.39. The BSE Sensex touched intraday high of 12,181.43 and intraday low of 11,501.85.

On Tuesday, the US market was once again caught in the tight grip of bears as Fed Chariman Mr. Ben Bernanke made some cautious comments about Federal Reserve’s plan to improve liquidity in the short term corporate borrowing. He also stated that this economic turmoil could prevail in 2009. On the other hand Bank of America recorded lower than expected third quarter earnings and has plans to raise $10 billion in common stock offering. It has further cut it dividend by 50% to $0.32. Crude oil for November delivery fell gained by $2.25 to $90.06 per barrel on the New York Mercantile Exchange. The Crude oil gained some momentum because OPEC president Chakib Khelil stated that the organization could take up some measures to keep the price of Oil stable. On the other hand Libya’s top official called for a cut in production of Crude oil.

The Dow Jones Industrial Average (DJIA) was low by 508.39 points at 9,447.11 along with NASDAQ index which was low by 108 points at 1,754.01 and the S&P 500 (SPX) also declined by 60.66 points to close at 996.23 points.

Indian ADRs ended down. In technology sector, Wipro closed lower by (7.79%) followed by Satyam that ended down by (7.81%) and Patni Computers by (7.76%). In banking sector ICICI Bank fell by (14.57%), while HDFC Bank lost (3.19%). In telecommunication sector, Tata Communication fell the lowest by (18.92%), while MTNL plunged (6.07%). Sterlite Industries fell by (10.11%).

Today the major stock markets in Asia opened negative amidst concerns of weak sentiments in US markets. The Shanghai Composite is low by 65.75points and trading at 2,092.089. Further Japan''s Nikkei is low by 460.78 points at 9,695.12, Straits Times is also low by 92.68 points at 2,084.87 and South Korea’s Seoul Composite was low by 48.55 points at 1,317.55.

The FIIs on Tuesday stood as net sellers in equity and net buyers in Debt. Gross equity purchased stood at Rs1995.20 Crore and gross debt purchased stood at Rs187 Crore, while the gross equity sold stood at Rs3116.60 Crore and gross debt sold stood at Rs95.70 Crore. Therefore, the net investment of equity and debt reported were (Rs1121.40 Crore) and Rs91.40 Crore respectively.

On Tuesday, the partially convertible rupee ended at 47.92/93 per dollar, weakest since five and half years. The sharp selling in the Capital markets and the consequent huge outflow of foreign funds brought the rupee to the lowest. After an early sharp fall the rupee moderated as Banks started selling dollar in the current cash market and simultaneously took position in the forward market.

On BSE, total number of shares traded were 28.46 crores and total turnover stood at Rs4,741.54 Crore. On NSE, total volumes of shares traded were 58.15 crores and total turnover was Rs12,804.08 Crore.

Top traded volumes on NSE Nifty – ITC with total volume of 17629022 shares followed by Reliance Petro 15876513 shares, Unitech 13576436 shares, ICICI Bank 12438534 shares and Suzlon Energy 9545330 shares.

On NSE Future and Options, total number of contracts traded in index futures was 1242125 with a total turnover of Rs21301.02 Crore. Along with this total number of contracts traded in stock futures were 1003247 with a total turnover of Rs14052.5 Crore. Total number of contracts for index options was 1213234 and total turnover was Rs23687.84 Crore and total number of contracts for stock options was 45962 and notional turnover was Rs726.34 Crore.

Today, Nifty would have a support at 3,450 and resistance at 3,655 and BSE Sensex has support at 11,350 and resistance at 12,050.