Pre Session Commentary - Nov 28 2008

Today markets are likely to open with a negative gap amidst concerns over the terrorist attack in the financial capital, Mumbai. The operation to flush out the terrorist is not yet over and hence the sentiments of trading would be very low. One could anticipate a thin trade today due to weak sentiments. Overall the roll over contracts today would decide the further sentiments of trading. After a negative opening in the morning we also anticipate a bounce back later. The inflation numbers look soft at 8.84% lower by 6bps from 8.90% in the week earlier.

On Wednesday, domestic markets managed to end with green numbers despite volatile trading session. The investors were optimistic on a rate cut from RBI as China''s central bank cut banks'' benchmark lending and deposit rates by 108bps, the fourth cut since mid-September. The one-year bank loans will fall to 5.58% from 6.66%, while the benchmark one-year deposit rate falls to 2.52% from 3.60%. Sensex ended with a gain of 3.81% whereas, Nifty closed with a gain of 3.70% respectively. Bankex, Oil & Gas and Metal gained by 5.96%, 4.41% and 3.66% respectively. During the trading session we expect the market to be trading volatile.

The BSE Sensex closed high by 331.19 points at 9,026.72 and NSE Nifty ended up by 98.25 points at 2752.25. The BSE Mid Caps ended with a marginal gain of 4.79 points however Small Caps closed with losses of 18.53 points at 2,877.38 and 3,314.89. The BSE Sensex touched intraday high of 9,061.72 and intraday low of 8,658.53.

On Thursday, the US markets closed with phenomenal gains. The October personal spending dropped 1.0% month-over-month, which met estimates. Despite the dour housing data, homebuilders rose 13.6%. The Fed’s $600 billion plan to support housing lending spurred a drop in the average 30-year fixed mortgage rate to 5.81% from 5.98%, according to BankRate.com, which gave a lift to housing related stocks. The number of new unemployment claims dropped 14,000 to 529,000 for the week ended Nov. 22. Although this was slightly better than the expected reading of 535,000, it still represents a very weak labor market.

The Dow Jones Industrial Average (DJIA) closed higher by 247.14 points at 8,726.61 NASDAQ index gained 67.37 points at 1,532.10 and the S&P 500 (SPX) also closed higher by 30.29 points to close at 887.68 points.

Indian ADRs ended mixed. In technology sector, Infosys gained by 5.06% and Wipro ended high by 4.18% followed by Satyam that ended high by 2.35% and Patni Computers closing high by 6.13%. In banking sector ICICI Bank was low by (3.15%), while HDFC Bank gained 0.41%. In telecommunication sector, Tata Communication inclined by 6.88%, while MTNL inclined by 2.68%.

Today the major stock markets in Asia opened mixed. The Shanghai Composite is trading low by 23.79 at 1,894.06 Hang Seng is high by 296.40 points at 13,848.48. Further Japan''s Nikkei is high by 42.01 points at 8,415.40. Straits Times is also trading low by 15.53 points at 1,694.99 and South Korea’s Seoul Composite is high by 10.85 points at 1,074.33.

The FIIs on Wednesday stood as net buyers in equity and debt. The Gross equity purchased stood at Rs 1384.20 Crore and gross debt purchased stood at Rs 179.70 Crore, while the gross equity sold stood at Rs 1,382.90 Crore and gross debt sold stood at Rs 37.80 Crore. Therefore, the net investment of equity and debt reported were Rs 1.30 Crore and Rs 142.00 Crore respectively.

On Wednesday, the partially convertible rupee ended at 49.48/50 per dollar, stronger by 0.9% on Tuesday’s closing at 49.93/95. The rupee gained strength on the back of huge dollar selling by corporate and phenomenal rally in the stock markets.

On BSE, total number of shares traded was Rs 25.57 Crore and total turnover stood at Rs 3,232.63 Crore. On NSE, total volume of shares traded was 51.77 Crore and total turnover was Rs 8,818.65 Crore.

Top traded volumes on NSE Nifty – Suzlon Energy with 49337802 shares, Unitech with total volume traded 45143845 shares, followed by SAIL with 11960100 shares, ICICI Bank with 11620249 shares and Reliance Comm with 11014088 shares.

On NSE Future and Options, total number of contracts traded in index futures was 1378947 with a total turnover of Rs 17,568.68 crores. Along with this total number of contracts traded in stock futures were 1370221 with a total turnover of Rs 13,562.58 Crore. Total numbers of contracts for index options were 1238249 with a total turnover of Rs 17237.53 Crore and total numbers of contracts for stock options were 44919 and notional turnover was Rs 520.17 Crore.

Today, Nifty would have a support at 2,590 and resistance at 2,700 and BSE Sensex has support at 8,560 and resistance at 8,935.