Pre Session Commentary - Jan 15 2009

Today the markets are likely to open with a negative gap. The US markets closed with heavy losses and therefore the Asian markets have also opened with blood bath. The sentiments across the globe are bearish and that will definitely affect the domestic sentiments as well. The inflation numbers would barely affect the markets’ movements. One could witness strong sell off in today’s trading session that would keep the markets at low levels in the southward direction.

On Wednesday, the markets traded closed in green. The positive gap opening in morning session was backed by remarkable recovery witnessed in Asian markets that further bolstered the domestic markets till the end. Stocks like Reliance and Infosys also helped maintain positive sentiments across broader markets. All the sectors managed to close in green and sectors like Oil & Gas, IT, Teck, Realty and Metal were the forerunners with gains of 5.85%, 5.02%, 4.57%, 4.38% and 4.18% respectively. Sensex and Nifty gained 3.30% and 3.29% respectively. Mid caps and Small caps also gained by 1.90% and 1.26% respectively. During the session we expect the markets to be trading in deep red.

The BSE Sensex closed higher by 299.13 points at 9,370.49 and NSE Nifty ended higher by 90.35 points at 2,835.30. The BSE Mid Caps and Small Caps ended with gains of 57.07 points and 43.34 points at 3,063.48 and 3,485.69 respectively. The BSE Sensex touched intraday high of 9,412.97 and intraday low of 9,202.57.

On Wednesday, the US markets closed in red. There was lack of buying in broader markets as the sentiments and expectations about the corporate profits are waning. Disappointing economic data also weighed on sentiment this session. Reports indicate that Deutsche Bank will post a fourth quarter loss further JPMorgan’s announcement also looms. On the other hand advance December retail sales dropped 2.7% month-over-month. Excluding autos, sales were down 3.1%. Crude oil futures for the month of February delivery fell by 50 cents to close at $37.28 per barrel on New York Mercantile Exchange. The crude futures touched as low as $35.54 per barrel. Crude prices came under pressure after the latest inventory data indicated a build of 1.14 billion barrels as compared to the expected 2.5 billion barrels. Though the build was less than expected, rising inventories continue pointing toward softer demand amid stiff economic headwinds.

The Dow Jones Industrial Average (DJIA) closed lower by 248.42 points at 8,200.14 NASDAQ index fell by 26.82 points at 1,489.64 and the S&P 500 (SPX) also closed lower by 29.17 points at 842.62.

Indian ADRs ended in red. In technology sector, Infosys went low by 3.54% and Wipro lost 7.14%. Further Patni Computers ended with a loss of 4.84% while Satyam closed down by 6.82%. In banking sector ICICI lost 3.17% along with HDFC Bank ended down by 5.39%. In telecommunication sector, Tata Communication lost 1.90%, and MTNL tumbled 2.27%. Sterlite Industries fell by 2.55%.

Today the major stock markets in Asia have opened with heavy blood bath. The Shanghai Composite is trading low by 22.20 points at 1,906.67 while Hang Seng is low by 743.60 points at 12,961.01. Further Japan''s Nikkei is trading low by 335.68 points at 8,102.77. South Korea’s Seoul Composite is low by 59.69 points at 1,122.99 and Singapore’s Strait Times is also low by 61.55 points at 1,703.17.

The FIIs on Wednesday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 1640.00 Crore and gross debt purchased stood at Rs 193.40 Crore, while the gross equity sold stood at Rs 1974.40 Crore and gross debt sold stood at Rs 276.40 Crore. Therefore, the net investment of equity and debt reported were Rs (334.40) Crore and Rs (83.00) Crore respectively.

On Wednesday, Indian Rupee closed at 48.85/86 per dollar, 0.5% stronger than Tuesday’s close of 49.11/12. The rupee gained strength on the back of rebound in stock markets.

On BSE, total number of shares traded were 24.27 Crore and total turnover stood at Rs 2,818.60 Crore. On NSE, total number of shares traded were 57.56 Crore and total turnover was Rs 8,277.39 Crore.

Top traded volumes on NSE Nifty – Unitech with 49788796 shares, Suzlon Energy with 20390272 shares, Reliance Comm with total volume traded 17102249 shares, SAIL with 10955314 shares followed by Reliance Power with 9092972 shares.

On NSE Future and Options, total number of contracts traded in index futures was 907863 with a total turnover of Rs 11,801.64 Crore. Along with this total number of contracts traded in stock futures were 921382 with a total turnover of Rs 9,198.28 Crore. Total numbers of contracts for index options were 1028406 with a total turnover of Rs 14869.91 Crore and total numbers of contracts for stock options were 72152 and notional turnover was Rs 896.93 Crore.

Today, Nifty would have a support at 2,705 and resistance at 2,803 and BSE Sensex has support at 8,988 and resistance at 9,280.