Pre Session Commentary - Dec 30 2008

Today the markets are likely to open positive. The monetary action to be taken shortly by the government may pump the morale of investors as more rate cuts are likely to come in near future due to softening of inflation. The majority of Asian markets have also opened positive despite negative closing of the US markets. The oil marketing companies’ stocks may be under pressure today as the Crude oil prices have gone up due to recent Israeli attack on Gaza province. Amidst minor hiccups we expect markets to trade volatile.

On Monday, the markets opened with a negative gap however after the post mid session it managed to close in green. The negative sentiment was seen in the morning because on Friday the advance tax collection data showed a fall of 22% yoy. However the markets started bouncing back after the planning commission deputy chairman Montek Singh Ahuwalliah announced about monetary action as the inflation has clammed down. On the other hand he also ruled out the possibility of any other fiscal stimulus. Sensex and Nifty gained 2.19% and 2.27%. Bankex, Metal, Oil & Gas and Power gained 3.71%, 3.23%, 2.87% and 2.01% respectively. During the trading session we expect the markets to be trading volatile.

The BSE Sensex closed higher by 204.60 points at 9,533.52 and NSE Nifty ended up by 64.95 points at 3060.75. The BSE Mid Caps and Small Caps ended with gains of 40.86 points and 22.97 points at 3,147.54 and 3,571.51 respectively. The BSE Sensex touched intraday high of 9,550.40 and intraday low of 9,162.66.

On Monday, the US markets closed in red. The sentiments were weak as there was not enough news to carry the market flow. However the markets managed to pare off its day’s early losses. The merger between Rohm and Hass has been questioned and therefore they were the biggest decliners and also most active traded stocks. On the other hand due to surge in oil prices the energy stocks were in the lime light. Crude oil futures for the month of February delivery grew $2.31 to $40.02 per barrel on New York Mercantile Exchange. The contract hit an intraday high of $42.20 a barrel in electronic trading amidst rising tension in the Middle East. The Israeli air strike in the Gaza Strip has raised concerns over the supply of oil. This has increased worries about a possible disruption to energy supplies from the Middle East.

The Dow Jones Industrial Average (DJIA) closed low with 219.35 points at 8,604.99 NASDAQ index fell 26.94 points at 1,552.37 and the S&P 500 (SPX) also closed lower by 19.14 points to close at 885.28 points.

Indian ADRs ended mixed. In technology sector, Infosys fell by 0.87% and Wipro gained by 8.53%, further Satyam ended with a gain of 6.19% and Patni Computers closed high by 0.18%. In banking sector ICICI Bank gained 8.94%, HDFC Bank grew by 9.61%. In telecommunication sector, Tata Communication rose by 2.96%, while MTNL inclined by 6.21%.

Today the major stock markets in Asia opened mixed. The Shanghai Composite is trading low by 3.54 points at 1,846.94 Hang Seng is high by 64.46 points at 14,392.94. Further Japan''s Nikkei gained by 112.39 points at 8,859.56. Taiwan weighted is high by 150.06 points 4,566.22 and Singapore’s Strait Times is low by 5.70 points at 1,774.87.

The FIIs on Monday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 356.80 Crore and gross debt purchased stood at Rs 58.70 Crore, while the gross equity sold stood at Rs 616.10 Crore and gross debt sold stood at Rs 803.70 Crore. Therefore, the net investment of equity and debt reported were Rs (259.30) Crore and Rs (745.00) Crore respectively.

On Monday Indian Rupee closed at 48.42/43 a dollar, 3 paise stronger than Friday''s close of 48.45/46. Rupee gained strength due to surge in the stock markets.

On BSE, total number of shares traded were 27.52 Crore and total turnover stood at Rs 3,411.55 Crore. On NSE, total number of shares traded were 61.02 Crore and total turnover was Rs 9,062.00 Crore.

Top traded volumes on NSE Nifty – Unitech with 79334535 shares, Satyam with 73939412 shares, Suzlon Energy with total volume traded 34369164 shares followed by Reliance Petro 20682488 shares and SAIL with 17846467 shares.

On NSE Future and Options, total number of contracts traded in index futures was 816829 with a total turnover of Rs 10,881.06 Crore. Along with this total number of contracts traded in stock futures were 877900 with a total turnover of Rs 8,758.58 Crore. Total numbers of contracts for index options were 857877 with a total turnover of Rs 12,892.07 Crore and total numbers of contracts for stock options were 72527 and notional turnover was Rs 794.38 Crore.

Today, Nifty would have a support at 2,895 and resistance at 2,962 and BSE Sensex has support at 9,325 and resistance at 9,710.