Pre Session Commentary - Dec 12 2008

oday we expect the market to open with a negative gap as US markets have closed in red and other Asian markets opened with heavy blood bath. The IIP numbers to be announced today will also play an important role in the markets sentiments. Amidst the insecure feeling and cautious approach one would witness some early losses in the day’s trade. The feelings across the globe are bearish and hence investors would have to be very cautious in their holdings.

On Thursday, the markets moved highly volatile however later managed to end flat. The sentiments were not as strong as in the previous day and later during the trading session it collapsed by nearly 200 points. Asian markets were also trading volatile coupled with the European markets, which ended in red. Towards the end the good inflation numbers helped the markets pare off its losses and managed to close flat. Sensex and Nifty gained by 5.37% and 5.18%. Realty, Oil & Gas and Metal gained 2.12%, 1.67% and 1.37% respectively. During the trading session we expect the market to be trading volatile.

The BSE Sensex closed marginally lower by 9.44 points at 9,645.46 and NSE Nifty ended slightly down by 8.10 points at 2,920.15. The BSE Mid Caps and Small Caps ended with gains of 54.84 points and 48.14 points at 3,003.08 and 3,443.59 respectively. The BSE Sensex touched intraday high of 9,746.01 and intraday low of 9,441.97.

Inflation for the week ended 29th November 2008, stood at 8% as compared to 8.4% of the previous week. It was 3.89% during the corresponding week last year. Inflation rate for primary articles, which has a weight of 22% in the index number, fell to 11.66% in the reported week as compared to 11.98% in the previous week.

On Thursday, the US markets closed negative as the macro economic data pulled the sentiments. The U.S. House of Representatives approved yesterday a $14 billion plan to aid Ford, General Motors, and Chrysler, but the plan is encountering resistance in the Senate. On the other hand October trade deficit climbed to $57.2 billion from $56.6 billion as the exports dropped significantly. Initial jobless claims for the week ended December 6 increased 58,000 to 573,000. Continuing claims increased to 4.43 million from 4.09 million. Crude oil futures for the month of January delivery grew $4.46 to $47.98 per barrel on New York Mercantile Exchange. The crude futures soared on the back of sharp weakness in the dollar and expectations that the Organization of Petroleum Exporting Countries will deliver a significant production cut next week.

The Dow Jones Industrial Average (DJIA) closed lower with 196.33 points at 8,565.09 NASDAQ index lost 57.60 points at 1,507.88 and the S&P 500 (SPX) also closed lower by 25.65 points to close at 873.59 points.

Indian ADRs ended mixed. In technology sector, Infosys lost by 4.35% and Wipro ended low by 3.24% followed by Satyam that gained 0.0.08% and Patni Computers closing low by 3.93%. In banking sector ICICI Bank lost 0.71%, while HDFC Bank gained by 1.68%. In telecommunication sector, Tata Communication inclined by 0.66%, while MTNL inclined by 1.28%.

Today the major stock markets in Asia opened with heavy blood bath. The Shanghai Composite is trading low by 39.04 at 1,992.64 Hang Seng is low by 803.88 points at 14,810.02. Further Japan''s Nikkei is low by 110.37 points at 8,610.18. South Korea’s Seoul Composite is low by 31.25 points at 1,123.18 and Singapore’s Strait Times is low by 62.12 points at 1,732.04.

The FIIs on Thursday stood as net buyer in equity and net seller in debt. Gross equity purchased stood at Rs 2603.20 Crore and gross debt purchased stood at Rs 102.40 Crore, while the gross equity sold stood at Rs 1614.80 Crore and gross debt sold stood at Rs 555.40 Crore. Therefore, the net investment of equity and debt reported were Rs 988.40 Crore and Rs (453.00) Crore respectively.

On Thursday, the partially convertible rupee ended at 48.33/34 per dollar as against 48.25 on Friday last week. The rupee ended stronger by 1.4% as there was unwinding of long dollar positions in the non-deliverable markets, which prompted banks to sell dollars in the spot market.

On BSE, total number of shares traded was Rs 38.58 Crore and total turnover stood at Rs 4,638.42 Crore. On NSE, total volume of shares traded was Rs 84.74 Crore and total turnover was Rs 12,074.93 Crore.

Top traded volumes on NSE Nifty – Unitech with 69099536 shares, Suzlon Energy with total volume traded 57853064 shares, followed by Reliance Petro with 25300006 shares, DLF with 22908063 shares and SAIL with 18876949 shares.

On NSE Future and Options, total number of contracts traded in index futures was 942024 with a total turnover of Rs 12,693.06 Crore. Along with this total number of contracts traded in stock futures were 1107143 with a total turnover of Rs 10,989.57 Crore. Total numbers of contracts for index options were 949555 with a total turnover of Rs 14,057.38 Crore and total numbers of contracts for stock options were 81593 and notional turnover was Rs 866.16 Crore.

Today, Nifty would have a support at 2,795 and resistance at 2,905 and BSE Sensex has support at 9,180 and resistance at 9,580.