Pre Session Commentary - Jan 16 2009

Today the markets are likely to open positive as the US markets closed with moderate gains and the Asian markets have opened positive. After a brutal loss in yesterday’s trade one could witness some bounce back today. The WPI inflation numbers recorded at 5.24% for the weak ended January 3 2009 better than 5.91% in the previous weak. The sentiments prevailing across the markets in the world are weak and therefore any fall in other Asian markets during the later trading session could affect the domestic markets’ movements. One could witness some bounce back with volatile trading in today’s trading session.

On Thursday, the markets closed in deep red. After a negative gap opening, the markets continued to fall towards the southward. The bearish sentiments had emanated from US and finally afflicted the Asian markets as well. The bears had a complete hold of the markets and therefore selling pressure was witnessed across the broader markets. The heavy stocks like ICICI bank, Jaiprakash, Sterlite and Tata Steel faced the severe blaze of the bears. All the sectors closed in red and sectors like Bankex, Realty, Metal and Realty were brutally shattered as they fell by 5.69%, 4.72%, 4.53% and 4.11% respectively. Sensex and Nifty lost 3.45% and 3.48% respectively. Mid caps and Small caps also lost by 1.72% and 2.16% respectively. During the session we expect the markets to be trading volatile.

The BSE Sensex closed lower by 323.75 points at 8,946.62 and NSE Nifty ended lower by 98.60 points at 2,736.70. The BSE Mid Caps and Small Caps ended with losses of 52.67 points and 75.21 points at 3,010.81 and 3,410.48 respectively. The BSE Sensex touched intraday high of 9,123.78 and intraday low of 8,946.62.

On Thursday, the US markets closed in green. The markets bounced back to record moderate gains as the investors gave some support. Eight out of 10 sectors closed in green as telecom and financials were the only sectors that faced losses of 1.1% and 5.1% respectively. JPMorgan Chase reported fourth quarter adjusted earnings of $0.07 per share, which was better than the break-even level that Wall Street was expecting. The Wall Street Journal reported that Bank of America is close to receiving additional federal aid to assist in the acquisition of Merrill Lynch, even though the bank has already received $25 billion in federal funds. Crude oil futures for the month of February delivery fell by $2.03 to $35.25 per barrel on New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed higher by 12.35 points at 8,212.49 NASDAQ index rose by 22.20 points at 1,511.84 and the S&P 500 (SPX) also closed higher by 1.12 points at 843.74.

Indian ADRs ended down. In technology sector, Satyam plunged by 20.33% and Wipro lost 1.24%. Further Patni Computers ended with decrease of 3.46% while Infosys gained 2.72%. In banking sector ICICI Bank lost 3.74% along with HDFC Bank ended down by 2.70%. In telecommunication sector, Tata Communication dropped by 5.24% and MTNL tumbled 1.66%. Sterlite Industries decreased by 1.87%.

Today major stock markets in Asia have opened with gains. The Shanghai Composite is trading high by 42.88 points at 1,963.09 while Hang Seng is high by 63.57 points at 13,306.53. Further Japan''s Nikkei is trading high by 121.08 points at 8,144.39. South Korea’s Seoul Composite is high by 10.02 points at 1,121.36 and Singapore’s Strait Times is also high by 15.06 points at 1,719.12.

The FIIs on Thursday stood as net buyer in equity and net sellers in debt. Gross equity purchased stood at Rs 1689.70 Crore and gross debt purchased stood at Rs 212.90 Crore, while the gross equity sold stood at Rs 1614.80 Crore and gross debt sold stood at Rs 573.90 Crore. Therefore, the net investment of equity and debt reported were Rs 74.80 Crore and Rs (361.10) Crore respectively.

On Thursday, Indian Rupee closed at 49.03/04 per dollar, 0.4% weaker than Wednesday’s close of 48.85/86. The rupee weakened due to drastic fall in stock markets concerning weak flow of foreign capital.

On BSE, total number of shares traded were 27.72 Crore and total turnover stood at Rs 2,904.93 Crore. On NSE, total number of shares traded were 61.76 Crore and total turnover was Rs 8,178.88 Crore.

Top traded volumes on NSE Nifty – Unitech with 49924290 shares, Suzlon Energy with 13952090 shares, Reliance Comm with total volume traded 13821308 shares, ICICI Bank with 9696693 shares followed by SAIL with 9526154 shares.

On NSE Future and Options, total number of contracts traded in index futures was 980691 with a total turnover of Rs 12,321.88 Crore. Along with this total number of contracts traded in stock futures were 926736 with a total turnover of Rs 8,775.73 Crore. Total numbers of contracts for index options were 1280468 with a total turnover of Rs 18,288.86 Crore and total numbers of contracts for stock options were 75042 and notional turnover was Rs 831.97 Crore.

Today, Nifty would have a support at 2,679 and resistance at 2,798 and BSE Sensex has support at 8,890 and resistance at 9,175.