Pre Session Commentary - Nov 7 2008

Today a market is expected to have negative opening on weak global cues. US markets ended in deep red and today Asian markets are trading sharply lower. Thursday, Indian market ended with heavy loses after showing smart recovery due to increase in inflation number to 10.72% for the week ended 25th October 2008. Market opened shapely lower following weak sentiments from global markets. US markets crashed badly and Asian markets were also lower due to disappointing US economic data. Private nonfarm employment in US fell by a larger-than-expected 157,000 in October, according to ADP. Further, market continued to trade lower with little volatility. Though market tried to recover and came out of days’ low on rebound in realty and capital goods shares during last hours of trading but was unable to hold that and drifted down again. From the sectoral front most major contributors of negative sentiments were Metal, Oil & Gas, Reality, Teck, IT, Bank and Auto stocks. However, Reality and Pharma stocks were able to favor from the market. Mid Cap and Small Cap stocks also remained out of favor as ended with cut of more than 2% each. We expect that market may lose further grounds during the trading session.

The BSE Sensex closed lower by 385.79 points at 9,734.22 and NSE Nifty ended down by 102.30 points at 2,892.65. The BSE Mid Caps and Small Caps closed with losses of 76.20 points 3,318.41 and by 84.51 points at 3,880.27. The BSE Sensex touched intraday high of 10,109.45 and intraday low of 9,635.22.

Wholesale price index stood at 10.72% for the week ended 25th October 2008, marginally above the previous week''s 10.68%. The annual inflation rate was 3.11% during the corresponding week of the previous year.

As an aid to the slowing economy, The European Central Bank cut its key lending rate by 50 basis points to 3.25% on Thursday. This is second cut within a month after reduction of 50 basis points on 8th October. Earlier the Bank of England cut rates by 150 basis points and the Swiss National Bank by 50 basis points.

Thursday, the US markets ended lower for second consecutive day on economic concerns and poor earnings. Weekly jobless claims also weighted on the sentiments as for the week ended 1st November stood at 481,000, down 4,000 from the previous week. Further, October unemployment rate is due today. Crude oil futures for the December delivery fell $4.53 to $60.77 a barrel on New York Mercantile Exchange. Crude oil dropped to their lowest level since March 2007, on concern about the impact of a global economic recession on oil demand and steep losses on the markets all over the world.

The Dow Jones Industrial Average (DJIA) dropped by 443.48 points to close at 8,695.79. The NASDAQ Composite (RIXF) index decreased by 72.94 points to close at 1,608.70 and the S&P 500 (SPX) lost 47.89 points to close at 904.88.

Indian ADRs ended down. In technology sector, Infosys ended lower by (10.47%) along with Wipro lost (8.56%), Satyam ended down by (7.19%) and Patni Computers closed lower by (6.14%). In banking sector HDFC Bank and ICICI Bank lost (4.81%) and (2.68%). In telecommunication sector, Tata Communication advanced by (0.15%), while MTNL was down by (1.98%). Sterlite Industries decreased by (15.59%).







Today major stock markets in Asia are trading lower. Japan''s Nikkei is trading lower by 386.85 points at 8,512.29. Further, Hang Seng lost 292.28 points at 13,497.76 and Singapore’s Straits Times plunged 49.82 points at 1,769.38. The Taiwan Weighted tumbled 35.75 points at 4,658.37 and South Korea’s Seoul Composite declined 5.86 points at 1,086.36.

The FIIs on Thursday stood as net buyer in equity and net seller in debt. Gross equity purchased stood at Rs2432.30 Crore and gross debt purchased stood at Rs51.60 Crore, while the gross equity sold stood at Rs2092.80 Crore and gross debt sold stood at Rs382.50 Crore. Therefore, the net investment of equity and debt reported were Rs339.50 Crore and (Rs330.90 Crore) respectively.

On Thursday, the Indian rupee ended at 47.66/69, 0.4% weaker from 47.46/50 at close on Wednesday. India''s rupee ended lower due to heavy losses in the stock market that raised worries of further foreign fund outflows.

On BSE, total number of shares traded was 32.07 Crore and total turnover stood at Rs. 4,010.92 Crore. On NSE, total volume of shares traded was 68.79 Crore and total turnover was Rs 10,894.60 Crore.

Top traded volumes on NSE Nifty – Suzlon Energy with total traded volume of 47058457 shares, followed by Unitech Ltd with 31007469 shares, RPL with 18432508 shares, DLF Ltd with 13359479 shares and ICICI Bank with 13076384 shares respectively.

On NSE Future and Options, total numbers of contracts traded in index futures were 1125600 with a total turnover of Rs.15,371.33 Crore. Along with this total number of contracts traded in stock futures were 983999 with a total turnover of Rs.10,624.26 Crore. Total numbers of contracts for index options were 1121250 and total turnover was Rs.17,279.69 Crore and total numbers of contracts for stock options were 50245 and notional turnover was Rs.560.80 Crore.

Today, Nifty would have a support at 2,724 and resistance at 2,942 and BSE Sensex has support at 9,145 and resistance at 9,932.