Pre Session Commentary - Dec 11 2008

Today markets are likely to open negative despite US markets have ended in green. However after phenomenal gains for the two consecutive trading days, today one could anticipate some profit booking pressures. Yesterday’s rally showed strong Bull Run but one cannot ignore the weak sentiments that still persist across the broader markets. Asian Markets have opened with blood bath and there are possibilities that domestic markets may follow the same trend. The sentiments won’t be that strong and hence volatility is likely to creep during the later trading session.

On Wednesday, the markets opened with a positive gap and managed to retain firmness till the end. The positive sentiments across Asian markets also helped boost the morale of investors as the trend in benchmark indices remained firm till the end. The volume of trades in benchmark indices was phenomenal and sectors like Metal, Oil, Telecom and Capital Goods witnessed huge buying. Sensex and Nifty gained by 5.37% and 5.18%. Realty, Metal, Oil & Gas and Capital Goods gained 12.56%, 8.38%, 6.97% and 4.51% respectively. During the trading session we expect the market to be trading volatile.

The BSE Sensex closed with a gain of 492.28 points at 9,654.90 and NSE Nifty ended higher by 144.25 points at 2,928.25. The BSE Mid Caps and Small Caps ended with gains of 63.21 points and 52.25 points at 2,948.24 and 3,395.45. The BSE Sensex touched intraday high of 9,678.70 and intraday low of 9,280.16.

On Wednesday, the US markets closed positive on the back of huge bail out package for the US Auto makers. The White House confirmed that it has reached an agreement with congressional Democrats on a $15 billion aid package for U.S. automakers. The White House called the aid either a bridge to viability or a bridge to bankruptcy. The crude futures soared to a high of $46.17 a barrel on globex. The crude oil futures however ended below the intraday highs after the U.S. Energy Information Administration (EIA) reported that crude-oil inventories during the week ended Dec. 5 rose by 400,000 barrels to stand at 320.8 million barrels. Further, there was speculation that Saudi Arabia may implement a big production cut in January also added to the rally.

The Dow Jones Industrial Average (DJIA) closed higher with 70.09 points at 8,761.42 NASDAQ index gained 18.14 points at 1,565.48 and the S&P 500 (SPX) also closed higher by 10.57 points to close at 899.24 points.

Indian ADRs ended mixed. In technology sector, Infosys gained by 0.56% and Wipro ended high by 1.17% followed by Satyam that gained 0.49% and Patni Computers closing high by 2.99%. In banking sector ICICI Bank gained 8.68%, while HDFC Bank gained by 3.26%. In telecommunication sector, Tata Communication inclined by 8.68%, while MTNL inclined by 4.70%.

Today the major stock markets in Asia opened negative. The Shanghai Composite is trading low by 3.36 at 2,072.73 Hang Seng is low by 25.37 points at 15,552.37. Further Japan''s Nikkei is low by 64.67 points at 8,595.57. South Korea’s Seoul Composite is high by 10.83 points at 1,156.70 and Singapore’s Strait Times is low by 6.78 points at 1,814.92.

The FIIs on Wednesday stood as net buyers in equity and debt. Gross equity purchased stood at Rs 1,724.50 Crore and gross debt purchased stood at Rs 193.70 Crore, while the gross equity sold stood at Rs 1,264.20 Crore and gross debt sold stood at Rs 35.20 Crore. Therefore, the net investment of equity and debt reported were Rs 460.40 Crore and Rs 158.50 Crore respectively.

On Wednesday, the partially convertible rupee ended at 49.11 per dollar as against 49.58/59 on Friday last week. The rupee ended stronger by 0.20% as the stock markets witnessed a phenomenal rally.

On BSE, total number of shares traded was Rs 31.14 Crore and total turnover stood at Rs 4,180.57 Crore. On NSE, total volume of shares traded was Rs 72.70 Crore and total turnover was Rs 11,519.57 Crore.

Top traded volumes on NSE Nifty – Unitech with 92869953 shares, Suzlon Energy with total volume traded 48191834 shares, followed by SAIL with 26293865 shares, DLF with 26196390 shares and Tata Steel with 15661932 shares.

On NSE Future and Options, total number of contracts traded in index futures was 1033254 with a total turnover of Rs 13,892.64 Crore. Along with this total number of contracts traded in stock futures were 986466 with a total turnover of Rs 9,817.12 Crore. Total numbers of contracts for index options were 1312292 with a total turnover of Rs 19,111.84 Crore and total numbers of contracts for stock options were 74492 and notional turnover was Rs 775.96 Crore.

Today, Nifty would have a support at 2,838 and resistance at 2,970 and BSE Sensex has support at 9,409 and resistance at 9,735.