Pre Session Commentary - Dec 18 2008

Today markets are likely to open negative and trade volatile during the session. After yesterday’s weak trading one could gauge the weak sentiments prevailing across markets. The sentiments are still under the bearish influence and any sing of firmness at this point is questionable. The markets trend seems to have halted after it touched the 10k mark, the sentiments emanating from the broader markets. The sense of volatility would creep in during the trading session as there is not much good factor to defend from bears.

On Wednesday, the markets traded volatile and later succumbed to the negative cues from European markets. The Fed’s rate cut plan had minimal impact on the domestic markets’ sentiments. The majority of Asian markets had traded positive since phenomenal opening in the morning. However the domestic investors were highly skeptical on the fall of European markets. Profit booking and sense of insecurity pulled the markets southwards. Sensex and Nifty lost 2.62% and 2.87%. Realty, Teck, Power and Metal conceded losses of 7.36%, 5.02%, 4.44% and 4.36% respectively. Among the sectors Bankex was at the safest zone with a least fall of 0.15%. During the trading session we expect the markets to be trading volatile with negative bias.

The BSE Sensex closed lower by 261.69 points at 9,715.29 and NSE Nifty ended low by 87.40 points at 2,954.35. The BSE Mid Caps and Small Caps ended with losses of 108.04 points and 98.09 points at 3,136.17 and 3,678.56 respectively. The BSE Sensex touched intraday high of 10,073.10 and intraday low of 9,682.91.

On Wednesday, the US markets closed in red. The sentiments were weak despite Fed’s decision of reducing the lending rates between 0 to 0.25%. Morgan Stanley posts wore than expected results. Citigroup, Morgan Stanley and Goldman Sacs were among the laggards in the financial sector. On the other hand, in the debt markets the Government Debts considered to be the safest investment avenue closed higher with a yield of 2.16% on 10-year note. Crude oil futures for the month of January delivery fell $3.54 to $40.06 per barrel on New York Mercantile Exchange. The OPEC has planned to reduce the oil production by 4.2 million barrels to 24.85 million barrels.

The Dow Jones Industrial Average (DJIA) closed low with 99.80 points at 8,824.34 NASDAQ index fell 10.58 points at 1,579.31 and the S&P 500 (SPX) also closed lower by 8.76 points to close at 904.42 points.

Indian ADRs ended mixed. In technology sector, Infosys gained by 3.49% and Wipro also gained by 2.73% followed by Satyam that surged by 50.00% and Patni Computers closing high by 0.33%. In banking sector ICICI Bank lost 2.75%, HDFC Bank plunged by 2.42%. In telecommunication sector, Tata Communication dropped by 6.63%, while MTNL declined by 1.18%.

Today the major stock markets in Asia opened mixed. The Shanghai Composite is trading low by 13.14 at 1,963.67 Hang Seng is low by 125.15 points at 15,335.37. Further Japan''s Nikkei is high by 43.25 points at 8,655.77. South Korea’s Seoul Composite is high by 7.08 points at 1,176.83 and Singapore’s Strait Times is high by 0.62 points at 1,176.83.

The FIIs on Wednesday stood as net buyer in buyer equity and net seller in debt. Gross equity purchased stood at Rs 1684.80 Crore and gross debt purchased stood at Rs 157.10 Crore, while the gross equity sold stood at Rs 1657.20 Crore and gross debt sold stood at Rs 418.90 Crore. Therefore, the net investment of equity and debt reported were Rs 27.50 Crore and Rs (261.80) Crore respectively.

On Wednesday Indian Rupee closed at 47.67/69 a dollar, 0.5% stronger than Tuesday''s close of 47.92/93. Despite the fall in the stock markets the rupee ended stronger as U.S. Federal Reserve lifted the sentiments by slashing interest rates.

On BSE, total number of shares traded were 42.01 Crore and total turnover stood at Rs 4,893.61 Crore. On NSE, total number of shares traded were 84.43 Crore and total turnover was Rs 12,872.23 Crore.

Top traded volumes on NSE Nifty – Satyam with 81279339 shares, Unitech with 41703824 shares, Suzlon Energy with total volume traded 39215005 shares, followed by SAIL with 17912516 shares, Reliance Petro with 14221929 shares.

On NSE Future and Options, total number of contracts traded in index futures was 1129470 with a total turnover of Rs 15,864.32 Crore. Along with this total number of contracts traded in stock futures were 1275936 with a total turnover of Rs 13,719.14 Crore. Total numbers of contracts for index options were 1255197 with a total turnover of Rs 18,978.24 Crore and total numbers of contracts for stock options were 69647 and notional turnover was Rs 798.36 Crore.

Today, Nifty would have a support at 2,897 and resistance at 3,020 and BSE Sensex has support at 9,550 and resistance at 9,930.