Pre Session Commentary - Jan 13 2009

Today the markets are likely to open negative. The other major Asian markets have also opened mixed and the US markets closed in red. The IIP numbers recorded a growth of 2.4% for the month of November as against a contraction of 0.3% in October. Despite this growth it has dark story to tell that the capital goods a lead indicator of investment activity witnessed a contraction of 2.3% as against a 9.2% growth over April-October. Further the November IIP numbers grew on the back of a base effect rather than a real growth in economic activity. There is huge amount of pain in the markets as investors are caught in the fist of insecurity and fear. The volume of trade is also little low as compared to previous trades. Infosys Technologies declared a healthy performance in the October-December quarter, reporting 14.5% rise in net profit to Rs 1641 crore as against Rs 1432 crore in the previous quarter. Income stood at Rs 5786 crore vs Rs 5418 crore (QoQ).

On Monday, the markets traded with extreme selling pressures and closed in red. The sentiments were fragile since the opening as the Asian markets traded in the south zone and the European markets also followed the same. The charm of the day was Satyam that gained 44.23% to close at Rs 34.40 on BSE. The extreme selling pressures were seen on sectors like Metal, Realty, IT, Power & CG that lost by 5.62%, 4.87%, 3.80%, 3.67% and 3.63% respectively. Sensex and Nifty lost by 3.15% and 3.48% respectively. Mid caps and Small caps also felt the burn as they lost 2.27% and 1.70% respectively. During the session we expect the markets to be trading volatile.

The BSE Sensex closed lower by 296.42 points at 9,110.05 and NSE Nifty ended lower by 99.90 points at 2,773.10. The BSE Mid Caps and Small Caps ended with losses of 70.78 points and 60.35 points at 3,050.01 and 3,495.25 respectively. The BSE Sensex touched intraday high of 9,331.13 and intraday low of 9,024.45.

On Monday, the US markets ended in red. The markets in US have once again closed in red exuding signs of selling pressures. Losses have been the worst amongst financial stocks as in the past two sessions it lost 9% amidst concerns of fear about what may still be lurking on the balance sheets of banks. Financials were the worst performing sector in 2008, losing roughly 58%, and are currently the worst performing sector in 2009, currently down 13% year-to-date. Crude oil futures for the month of February delivery fell by $3.24 to $37.59 per barrel on New York Mercantile Exchange. The crude futures fell for a fifth straight session, to close at the lowest level in more than two weeks, due to the continued concerns about a sharp slowdown in energy demand.

The Dow Jones Industrial Average (DJIA) closed lower by 125.13 points at 8,474.05 NASDAQ index lost 32.80 points at 1,538.79 and the S&P 500 (SPX) also closed lower by 20.09 points to close at 870.26.
Indian ADRs ended lower. In technology sector, Satyam tumbled 84.39% and Wipro lost 10.37%. Further Infosys ended with decrease of 2.23% and Patni Computers closed down by 0.20%. In banking sector ICICI Bank lost 7.31% along with HDFC Bank ended down by 5.04%. In telecommunication sector, Tata Communication lost 7.68%, while MTNL gained 4.44%. Sterlite Industries decreased by 7.09%.
Today the major stock markets in Asia have opened mixed. The Shanghai Composite is trading low by 22.69 points at 1,877.66 while Hang Seng is high by 13.38 points at 13,984.38. Further Japan''s Nikkei is trading low by 361.64 points at 8,475.16. South Korea’s Seoul Composite is high by 9.65 points at 1,166.40 and Singapore’s Strait Times is high by 25.11 points at 1,801.36.

The FIIs on Monday stood as net sellers in equity and net buyers in debt. Gross equity purchased stood at Rs 2815.30 Crore and gross debt purchased stood at Rs 96.20 Crore, while the gross equity sold stood at Rs 2993.20 Crore and gross debt sold stood at Rs 0.20 Crore. Therefore, the net investment of equity and debt reported were Rs (177.90) Crore and Rs 96.00 Crore respectively.

On Monday, Indian Rupee closed at 48.84/85 per dollar, 1.2% weaker than Friday’s close of 48.27/29. The rupee traded weak due to the plummeting stock markets and the some off-shore dollar demand.

On BSE, total number of shares traded were 28.46 Crore and total turnover stood at Rs 3,212.66 Crore. On NSE, total number of shares traded were 67.38 Crore and total turnover was Rs 9,692.25 Crore.

Top traded volumes on NSE Nifty – Unitech with 56133039 shares, Suzlon Energy with 34546216 shares, DLF with total volume traded 21920271 shares, Reliance Comm with 14626798 shares followed by SAIL with 12789427 shares.

On NSE Future and Options, total number of contracts traded in index futures was 1118249 with a total turnover of Rs 14,567.81 Crore. Along with this total number of contracts traded in stock futures were 1035845 with a total turnover of Rs 9,815.91 Crore. Total numbers of contracts for index options were 1333186 with a total turnover of Rs 19,633.18 Crore and total numbers of contracts for stock options were 84487 and notional turnover was Rs 936.60 Crore.

Today, Nifty would have a support at 2,688 and resistance at 2,810 and BSE Sensex has support at 8,815 and resistance at 9,211.