Pre Session Commentary - Jan 22 2009

Today the markets are likely to open with a positive gap as the US markets rebound due to better than expected quarterly results and majority of Asian markets have also opened in green. The sentiments across Asia are good after consecutive negative trades in prior sessions. Therefore today we expect our domestic markets to rebound on the back of recovery shown by other markets in Asia and US. The consecutive losses suffered in the prior sessions would prompt new positions today. Therefore today domestic markets are likely to rebound and trade positive.

On Wednesday, the markets once again faced heavy selling pressures and closed with huge negative gap. Since morning trade, the sentiments across Asia exuded relentless selling pressures. Later after the post mid session the downtrend of European markets set ablaze the domestic markets to close in deep red. Heavy selling was witnessed across broader markets and investors were also taking new short positions in the index heavyweights. On the front line, Heavy weights like ICICI Bank, Tata Power and Sterlite Industries faced enormous sell off. Sectors like Metal, Power, Bankex, Oil & Gas and Realty closed with losses of 4.07%, 3.91%, 3.91%, 3.78% and 3.61% respectively. On the other hand FMCG was the only sector left as a last resort for investors and therefore recorded a marginal gain of 0.84%. Sensex and Nifty lost 3.53% and 3.23% respectively. Mid caps and Small caps also shed 1.97% and 1.93% respectively. During the session we expect the markets to be trading positive.

The BSE Sensex closed lower by 321.38 points at 8,779.17 and NSE Nifty lost 90.45 points at 2,706.15. The BSE Mid Caps and Small Caps ended with losses of 59.50 points and 6.44 points at 2,956.51 and 3,372.65 respectively. The BSE Sensex touched intraday high of 9,051.31 and intraday low of 8,734.93.

The US markets on Wednesday closed in green. There was enough short covering that helped a remarkable rally among the stocks. The financial sector was the key driver after a 35% loss it suffered in the past two weeks. Better than expected results from Northern Trust and good purchases of Bank of America also helped maintain buying sentiments. Northern Trust reported fourth quarter earnings of $1.39 per share, which is $0.47 more than the estimated $0.92 per share and therefore its shares moved up by 31%. IBM also reported fourth quarter earnings of $3.28 per share, which is $0.25 better than the consensus estimate of $3.03 per share. IBM also expects 2009 earnings to be at least $9.20 per share, which is more than the $8.75 per share that Wall Street forecast. Crude oil futures for the month of February delivery grew by $2.71 to $43.55 per barrel on New York Mercantile Exchange. The crude futures closed above $43 a barrel backed by signs that the OPEC oil cartel is cutting output. Further the optimism about President Barack Obama''s economic stimulus package also added to the rally.

The Dow Jones Industrial Average (DJIA) closed higher by 279.01 points at 8228.10 NASDAQ index gained by 66.21 points at 1,507.07 and the S&P 500 (SPX) also closed higher by 35.02 points at 840.24.

Indian ADRs ended higher. In technology sector, Satyam ended up by 8.91% along with Infosys by 2.18%. Further Patni Computers ended with increase of 1.27% and Wipro closed up by 2.07%. In banking sector ICICI Bank and HDFC Bank advanced by 6.34% and 4.85% respectively. In telecommunication sector, Tata Communication lost 3.51% while MTNL gained 3.18%. Sterlite Industries increased by 0.20%.

Today major stock markets in Asia have opened positive. The Shanghai Composite is trading high by 2.67 points at 1,987.68. while Hang Seng is up by 145.04 points at 12,728.67. Further Japan''s Nikkei is trading low by 3.18 points at 7898.46. South Korea’s Seoul Composite is up by 10.20 points at 1,113.81 and Singapore’s Strait Times is also up by 20.28 points at 1,724.80.

The FIIs on Wednesday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 767.30 Crore and gross debt purchased stood at Rs 592.20 Crore, while the gross equity sold stood at Rs 1,059.50 Crore and gross debt sold stood at Rs 771.50 Crore. Therefore, the net investment of equity and debt reported were Rs (292.20) Crore and Rs (179.30) Crore respectively.

On Wednesday, Indian Rupee closed at 49.11/13 per dollar, 02% stronger than Tuesday’s close of 49.20/22. The rupee gained strength as exporters sold dollars to book cash, however the steep fall in stock markets resisted the further rise.

On BSE, total number of shares traded were 25.88 Crore and total turnover stood at Rs 2,852.17 Crore. On NSE, total number of shares traded were 56.44 Crore and total turnover was Rs 79.42 Crore.

Top traded volumes on NSE Nifty – Unitech with 47110550 shares, Suzlon Energy with 20061646 shares, SAIL with 12388616 shares, ICICI Bank with total volume traded 11918570 shares followed by NTPC with 9512265 shares.

On NSE Future and Options, total number of contracts traded in index futures was 1028488 with a total turnover of Rs 13,248.08 Crore. Along with this total number of contracts traded in stock futures were 1132842 with a total turnover of Rs 11,090.31 Crore. Total numbers of contracts for index options were 1262525 with a total turnover of Rs 17,852.71 Crore and total numbers of contracts for stock options were 78427 and notional turnover was Rs 835.86 Crore.

Today, Nifty would have a support at 2,680 and resistance at 2,775 and BSE Sensex has support at 8,710 and resistance at 9,025.