Pre Session Commentary - Jan 21 2009

Today the markets are likely to open negative as the US markets closed in deep red after the inauguration ceremony of newly elected president Barack Obama and the Asian markets have also opened with blood bath. The sentiments across Asia don’t look strong and the European markets have also exuded their grim after the announcement of RBS’s losses of $41 billion. The volumes of trade across BSE and NSE have been weak and the selling pressures are prevalent across broader markets. The quarterly results of various companies are not that appreciating though not below expectations.






On Tuesday, the markets traded with a negative gap and closed in red. The sentiments across the Asian markets looked fragile since the opening bell. The global factors hooked the market sentiments, as Royal Bank of Scotland reported the mammoth loss of $41 billion, largest in the UK’s corporate history. This news jolted the markets with fears of more financial crisis to come in future. The Indian corporate results had little to guide the domestic market sentiments as investors were obsessed with the ongoing financial crisis in the world. All the markets in Asia except the Shanghai Composite closed in red. European markets closed mixed after huge losses conceded in the previous day. On the domestic front sectors like Metal, Realty, Bankex, Oil & Gas and Auto closed with losses of 3.76%, 3.31%, 3.11% and 2.60% respectively. On the other hand Power and PSU were the only two sectors to close with marginal gains of 1.44% and 0.33% respectively. Sensex and Nifty lost 2.45% and 1.74% respectively. Mid caps and Small caps also shed 0.90% and 0.36% respectively. During the session we expect the markets to trade with deep cut.

The BSE Sensex closed lower by 229.02 points at 9,100.55 and NSE Nifty lost 49.60 points at 2,796.60. The BSE Mid Caps and Small Caps ended with losses of 27.52 points and 12.37 points at 3,016.01 and 3,439.09 respectively. The BSE Sensex touched intraday high of 9,159.76 and intraday low of 9,033.55.

The US markets on Tuesday closed in deep red after the inaugural ceremony of new elected president Barack Obama. There has been enough pain in the US markets and especially the financial sector which lost 16.70% on Tuesday’s trade. Barclays fell more than 40% this session as investors remain concerned that Britain''s government will take a stake in the outfit. There are also reports that the US government is planning for a second phase of aid for the banking system.

The Dow Jones Industrial Average (DJIA) dropped by 332.13 points to close at 7,949.09. The NASDAQ Composite (RIXF) index decreased by 88.47 points to close at 1,440.86 and the S&P 500 (SPX) fell 44.90 points to close at 805.22.

Indian ADRs ended down. In technology sector, Satyam ended lower by 8.18% and Infosys lost 5.52%. Further Patni Computers ended with decrease of 1.25% and Wipro closed down by 5.71%. In banking sector ICICI Bank and HDFC Bank dropped by 13.05% and 11.14% respectively. In telecommunication sector, Tata Communication and MTNL lost 7.45% and 5.98% respectively. Sterlite Industries decreased by 8.46%.

Today major stock markets in Asia have opened with a blood bath. The Shanghai Composite is trading high by 1.15 points at 1,995.27 while Hang Seng is low by 223.40 points at 12,736.37. Further Japan''s Nikkei is trading low by 65.76 points at 8,000.03. South Korea’s Seoul Composite is low by 158.31 points at 1,111.50 and Singapore’s Strait Times is also low by 26.46 points at 1,696.91.

The FIIs on Tuesday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 777.50 Crore and gross debt purchased stood at Rs 350.30 Crore, while the gross equity sold stood at Rs 1,217.20 Crore and gross debt sold stood at Rs 560.90 Crore. Therefore, the net investment of equity and debt reported were Rs (439.70) Crore and Rs (210.70) Crore respectively.

On Tuesday, Indian Rupee closed at 49.20/22 per dollar, 1% stronger than Monday’s close of 48.70/71. The fall in share markets triggered the fresh foreign money withdrawal and aroused doubts of foreign capital inflow.

On BSE, total number of shares traded were 29.02 Crore and total turnover stood at Rs 2,758.55 Crore. On NSE, total number of shares traded were 56.22 Crore and total turnover was Rs 7081.40 Crore.

Top traded volumes on NSE Nifty – Unitech with 71910115 shares, Suzlon Energy with 21199978 shares, NTPC with 13283145 shares, SAIL with total volume traded 10773766 shares followed by Power Grid Corp with 10744724 shares.

On NSE Future and Options, total number of contracts traded in index futures was 822691 with a total turnover of Rs 10,622.33 Crore. Along with this total number of contracts traded in stock futures were 949790 with a total turnover of Rs 9,246.81 Crore. Total numbers of contracts for index options were 1040105 with a total turnover of Rs 14,798.98 Crore and total numbers of contracts for stock options were 72985 and notional turnover was Rs 843.45 Crore.

Today, Nifty would have a support at 2,738 and resistance at 2,852 and BSE Sensex has support at 8,910 and resistance at 9,259.