Pre Session Commentary - Nov 19 2008

Today markets are likely to open positive as they have shed enough in the previous trading days. A little recovery is what we anticipate in today’s trading session. There are some positive efforts from the government to consolidate the domestic economic growth trend. Gov’t has imposed a 5% import duty on steel and iron & steel products; 20% import duty on edible and soya oil in a protectionist measure for domestic players. Govt has also urged various sectors like Airlines, Automobiles and hotel to reduce the prices to boost the demand. Gov’t may also reduce the sales tax on Airlines from 22% to 4% on a uniform basis. Realty sector on the other hand has urged for reduction in the loan interest rates to 7% so as to counter act the falling demand and the high cost of borrowings.

On Tuesday, domestic markets fell drastically and closed in red. The sentiments were weak as many other Asian and other European markets were also trading in red. The economic slowdown across the world has caused negative impact on the sentiments of investors. The FIIs are continuously pulling back their money. The Economic summit could not cheer the markets’ sentiments. Sensex and Nifty fell by 3.81% and 4.16% respectively. Teck, IT, Power and Bankex were the worst hit as they fell by 4.96%, 4.70%, 4.67% and 4.51% respectively. During the trading session we expect the market to be trading volatile.

The BSE Sensex closed lower by 353.81 points at 8,937.20 and NSE Nifty ended lower by 116.40 points at 2,683.15. The BSE Mid Caps and Small Caps closed with losses of 73.04 points at 3,060.32 and by 102.73 points at 3,558.66. The BSE Sensex touched intraday high of 9,169.05 and intraday low of 9,169.05.

On Tuesday, US markets closed in green. Hewlett-Packard announced that its preliminary fourth quarter earnings topped estimates and issued fiscal year 2009 earnings guidance was above expectations. The treasury also bought $ 33.6 billion in preferred stock from 21 banks. Ben Bernake stated that there are some signs of improvement in the Credit Markets. Crude oil futures for the December delivery rose by $56 cents to $54.39 a barrel on New York Mercantile Exchange. The crude oil prices fell on anticipations that the global economic meltdown would further curb the energy demand.

The Dow Jones Industrial Average (DJIA) closed higher by 151.17 points at 8424.75 NASDAQ index gained 1.22 points at 1,483.27 and the S&P 500 (SPX) also closed higher by 8.37 points to close at 859.12 points.

Indian ADRs ended negative. In technology sector, Infosys fell by (1.23%) and Wipro ended low by (2.91%) followed by Satyam that ended low by (4.37%) and Patni Computers closing low by (0.55%). In banking sector ICICI Bank was low by (3.26%), while HDFC Bank fell (2.33%). In telecommunication sector, Tata Communication declined by (0.53%), while MTNL declined by (4.15%). Sterlite Industries was low by (2.42%).

Today the major stock markets in Asia opened negative. The Shanghai Composite is trading high by 15.19 at 1,917.62. Hang Seng is low by 148.35 points at 12,767.54. Further Japan''s Nikkei is low by 148.28 points at 8,180.13. Straits Times is also trading low by 16.82 points at 1,675.73 and South Korea’s Seoul Composite is low by 39.51 points at 996.65.

The FIIs on Tuesday stood as net sellers in equity and net buyers in debt. The Gross equity purchased stood at Rs 1,586.50 Crore and gross debt purchased stood at Rs 714.70 Crore, while the gross equity sold stood at Rs 2,218.40 Crore and gross debt sold stood at Rs 176.90 Crore. Therefore, the net investment of equity and debt reported were (Rs 631.90) Crore and Rs 537.80 Crore respectively.

On Tuesday, the partially convertible rupee ended at 49.66/67 per dollar, weaker by 0.6% on Monday’s closing at 49.34/36. The fall in the share market and expectations of foreign money going out has led to depreciation in rupee. This year foreign funds have withdrawn $13.1 billion.

On BSE, total number of shares traded was 22.78 Crore and total turnover stood at Rs 3,031.86 Crore. On NSE, total volume of shares traded was 50.44 Crore and total turnover was Rs 8,330.23 Crore.

Top traded volumes on NSE Nifty – SAIL with total volume traded 26207709, followed by Unitech with 23471833, Suzlon Energy with 22470297, Reliance Petro with 10975453 and ICICI Bank with 10634806 shares.

On NSE Future and Options, total number of contracts traded in index futures was 1183511 with a total turnover for the same was Rs 14970.66 crores. Along with this total number of contracts traded in stock futures were 802230 with a total turnover of Rs 8509.13 Crore. Total numbers of contracts for index options were 1349464 and total turnover was Rs 19352.91 Crore and total numbers of contracts for stock options were 36312 and notional turnover was Rs 427.31 Crore.

Today, Nifty would have a support at 2,640 and resistance at 2,857 and BSE Sensex has support at 8,695 and resistance at 9,220.