Pre Session Commentary - Dec 17 2008

Today we expect markets to open positive amidst gain in US markets and phenomenal openings across the Asian markets. The Federal Open Markets Committee’s (FOMC) decision of reducing the key lending rate has brought charm in the markets around the world. The FOMC has stated that it is targeting to reduce the Fed’s fund rate to 0 to 0.25%. In a major incidence in the IT industry, Satyam has walked away from the $1.6 billion deal of buying Maytas Properties and Maytas Properties due to investors’ concerns. The domestic markets are likely to follow the global trend today. Despite the volatility that the markets had shown yesterday, today we expect the markets to trade firm with a positive trend.

On Tuesday, the markets traded volatile until it managed to gain after the post mid session. The lackluster markets of Asia had little impact on the domestic sentiments as the front like stocks like Reliance Industries, ONGC, ACC and HDFC Bank helped gain over all momentum. The second line stocks also rallied with strong sentiments for the consecutive day. Sensex crossed the psychological level of 10k and on the other hand Nifty managed to close above 3k mark. The UK markets like CAC, FTSE and Dax also rallied on the back of positive cues of rate cut by Fed. Sensex and Nifty gained by 1.47% and 2.03%. CD, PSU and Oil & Gas gained 7.44%, 5.03% and 3.30% respectively. The rest of the sectors also managed to close in green. During the trading session we expect the market to be trading with a positive trend.

The BSE Sensex closed higher by 144.59 points at 9,976.98 and NSE Nifty ended up by 60.55 points at 3,041.75. The BSE Mid Caps and Small Caps ended with good gains of 79.14 points and 117.56 points at 3,244.21 and 3,776.65 respectively. The BSE Sensex touched intraday high of 10,009.21 and intraday low of 9,790.31.

On Tuesday, the US markets closed in red. Despite the financial giant posted worst than expected quarterly results the markets managed to close in green on the back of the FOMC’s decision to reduce the key lending rates to 0 to 0.25%. The FOMC has stated that it is targeting to reduce the Fed’s fund rate to 0 to 0.25%. The November CPI has also declined below the expectations by 1.7%. On the other hand there are also rumors about automaker’s bailout which could be announced today. Crude oil futures for the month of January delivery fell $0.91 to $43.60 per barrel on New York Mercantile Exchange. The crude futures dropped to a low to $42.56 a barrel in the electronic trading on the back of the Federal Reserve''s comprehensive easing steps and gloomy economic outlook overtook expectations that the Organization of Petroleum Exporting Countries will cut member nations'' production quotas.

The Dow Jones Industrial Average (DJIA) closed higher with 359.61 points at 8,924.14 NASDAQ index gained 81.55 points at 1,589.89 and the S&P 500 (SPX) also closed higher by 44.61 points to close at 913.18 points.

Indian ADRs ended mixed. In technology sector, Infosys gained by 0.80% and Wipro also gained by 3.78% followed by Satyam that lost a whopping 54.58% and Patni Computers closing high by 2.38%. In banking sector ICICI Bank gained 11.07%, while HDFC Bank gained 11.63%. In telecommunication sector, Tata Communication inclined by 11.52%, while MTNL inclined by 1.80%.

Today the major stock markets in Asia opened positive. The Shanghai Composite is trading high by 24.92 at 1,999.93 Hang Seng is high by 168.16 points at 15,298.37. Further Japan''s Nikkei is high by 8.67 points at 8,576.69. South Korea’s Seoul Composite is low by 1.11 points at 1,160.45 and Singapore’s Strait Times is high by 10.38 points at 1,792.47.

The FIIs on Tuesday stood as net buyers in equity and net sellers in debt. Gross equity purchased stood at Rs 1798.60 Crore and gross debt purchased stood at Rs 113.40 Crore, while the gross equity sold stood at Rs 1559.20 Crore and gross debt sold stood at Rs 161.50 Crore. Therefore, the net investment of equity and debt reported were Rs 239.40 Crore and Rs (48.10) Crore respectively.

On Tuesday Indian Rupee closed at 47.92/93 a dollar, 0.3% stronger than Monday''s close of 48.05/06. The rallies in the capital markets have helped the Rupee gain strength despite huge demand for dollars by state run banks on behalf of Oil refineries.

On BSE, total number of shares traded were 37.80 Crore and total turnover stood at Rs 4,149.73 Crore. On NSE, total number of shares traded were 77.61 Crore and total turnover was Rs 11,116.37 Crore.

Top traded volumes on NSE Nifty – Unitech with 47429681 shares, Suzlon Energy with total volume traded 42000652 shares, followed by SAIL with 20463821 shares, Reliance Petro with 17131397 shares and DLF with 12238912 shares.

On NSE Future and Options, total number of contracts traded in index futures was 861407 with a total turnover of Rs 12,045.03 Crore. Along with this total number of contracts traded in stock futures were 997927 with a total turnover of Rs 10,548.77 Crore. Total numbers of contracts for index options were 1055038 with a total turnover of Rs 15,790.09 Crore and total numbers of contracts for stock options were 67880 and notional turnover was Rs 789.07 Crore.

Today, Nifty would have a support at 2,950 and resistance at 3,105 and BSE Sensex has support at 9,819 and resistance at 10,225.