Pre Session Commentary - Dec 8 2008

Today markets are likely to open positive on the back of fiscal stimulus announced by the government to help uplift the economy. RBI has also reduced the Repo and Reverse Repo rates by 100bps to 6.5% to 5% respectively. GOI has planned to pump in Rs 30,700 into the system to give the economy a boost in the current financial carnage happening around the world. Positive sentiments are likely to boost the morale of investors as a majority of measures have been taken to give a fillip to sectors worst affected. The Cenvat in Auto industry has been reduced by 4% which auto makers are planning to pass over the benefit to final consumers. One could anticipate some firm trend today amidst good feel factor.

On Friday, the markets opened positive, however during later trading session amidst extreme volatility it nose-dived into red. The markets moved 426.31 points showing extreme volatility in the southward and northward direction. The positive sentiments had pushed the markets in the green zone however the profit booking coupled with weak sentiments pulled the markets to low levels. Sensex and Nifty fell by 2.87% and 2.64%. CD, IT, Realty and Metal lost 4.37%, 4.36%, 3.50% and 3.42% respectively. During the trading session we expect the market to be trading firm with a positive trend.

The BSE Sensex closed with a loss of 264.55 points at 8,965.20 and NSE Nifty ended lower by 73.60 points at 2,714.40. The BSE Mid Caps and Small Caps ended with losses of 29.85 points and 8.26 points at 2,892.95 and 3,323.54. The BSE Sensex touched intraday high of 9,340.69 and intraday low of 8,914.38.

On Friday, the US markets closed positive despite the worst data of the job markets. The Federal Reserve has bought $5 billion of debt from Fannie Mae on the other hand General Motors and Chrysler is also asking congress for billion of dollars. The financial sector outperformed all other sectors throughout the session. On Saturday Crude oil on New York Mercantile Exchange for January rose by $1.67 to $42.48 a barrel. Crude oil rose for the first time in seven days in New York after the Organization of Petroleum Exporting Countries’ president said there was consensus for a “significant” production cut when the group meets next week.

The Dow Jones Industrial Average (DJIA) closed higher with 259.18 points at 8,635.42 NASDAQ index gained 63.75 points at 1,509.31 and the S&P 500 (SPX) also closed higher by 30.85 points to close at 876.07 points.

Indian ADRs ended mixed. In technology sector, Infosys gained by 3.80% and Wipro ended high by 4.71% followed by Satyam that gained 4.08% and Patni Computers closing high by 1.27%. In banking sector ICICI Bank gained 4.11%, while HDFC Bank rose by 9.65%. In telecommunication sector, Tata Communication declined by 1.58%, while MTNL declined by 4.45%.

Today the major stock markets in Asia opened positive. The Shanghai Composite is trading high by 53.18 at 2,071.83 Hang Seng is high by 991.41 points at 14,837.50. Further Japan''s Nikkei is high by 381.05 points at 8,298.56. South Korea’s Seoul Composite is high by 53.57 points at 1,081.7.

The FIIs on Friday stood as net buyers in equity and debt. Gross equity purchased stood at Rs 1779.50 Crore and gross debt purchased stood at Rs 897.50 Crore, while the gross equity sold stood at Rs 1,331.20 Crore and gross debt sold stood at Rs 255.70 Crore. Therefore, the net investment of equity and debt reported were Rs 448.30 Crore and Rs 641.70 Crore respectively.

On Friday, the partially convertible rupee ended at 49.57/58 per dollar, 0.6% stronger than Thursday’s close of 49.87/89. The rupee gained on expectations of rate cut.

On BSE, total number of shares traded was Rs 29.08 Crore and total turnover stood at Rs 3,755.84 Crore. On NSE, total volume of shares traded was Rs 67.30 Crore and total turnover was Rs 9,731.09 Crore.

Top traded volumes on NSE Nifty – Unitech with 101482509 shares, Suzlon Energy with total volume traded 45979606 shares, followed by ICICI Bank with 21857882 shares, DLF with 15536364 shares and SAIL with 15493951 shares.

On NSE Future and Options, total number of contracts traded in index futures was 975827 with a total turnover of Rs 12,348.65 crores. Along with this total number of contracts traded in stock futures were 988643 with a total turnover of Rs 9,410.58 Crore. Total numbers of contracts for index options were 1007387 with a total turnover of Rs 14,366.79 Crore and total numbers of contracts for stock options were 58779 and notional turnover was Rs 582.83 Crore.

Today, Nifty would have a support at 2,648 and resistance at 2,859 and BSE Sensex has support at 8,920 and resistance at 9,549.