Pre Session Commentary - Jan 23 2009

Today the markets are likely to open negative. The inflation recorded at 5.60% for the week ended Jan 10, 2008 as against 5.24% in the previous week. The sentiments are weak as the US markets closed in red and the major Asian markets have also opened with blood bath. The companies that have been reporting better than expected results are giving a back up for the delivery buying sentiments. However amidst the weak economic scenario and its repercussion on the corporate earnings, bearishness would prevail.

On Thursday, the markets managed to close in green after a volatile session towards the end. The opening was grim with enormous fear and cautiousness. Asian markets were not an exception as majority of the markets were trading volatile with marginal oscillation. Buying was less intense and therefore volumes of trade across broader markets were below the average level. After continuous fall of inflation numbers in the past, today the markets were stunned to see a rise in inflation at 5.60% as against 5.24% in the previous weak. Therefore instant sell off trimmed the morning gains and the markets plunged in red. Sectors like Realty, CD, Metal, CG and Auto closed with losses of 5.47%, 2.77%, 2.50%, 1.61% and 1.58% respectively. On the other hand Tech, Bankex, Oil & Gas and IT managed to keep their shine with gains of 1.27%, 0.74%, 0.39%, and 0.36% respectively. Sensex and Nifty gained 0.39% and 0.28% respectively. Mid caps and Small caps shed 2.07% and 2.01% respectively. During the session we expect the markets to be trading negative.

The BSE Sensex closed higher by 34.67 points at 8,813.84 and NSE Nifty gained 7.65 points at 2,713.80. The BSE Mid Caps and Small Caps ended with losses of 61.06 points and 67.70 points at 2,895.45 and 3,304.95 respectively. The BSE Sensex touched intraday high of 8,927.69 and intraday low of 8,699.32.

The US markets on Thursday closed in red. After a phenomenal gain in the previous day the US markets rebound. Microsoft also announced it will eliminate up to 5,000 jobs. The company has posted disappointing quarterly results. On the other hand Bank of America was brutally shattered as it fell by 14%. There were reports that indicated former Merrill Lynch boss John Thain will be leaving Bank of America. The non-farm payrolls initial claims for the week ending Jan. 17 jumped 62,000 to 589,000. The consensus estimate called for 543,000 claims. Continuing claims gained 97,000 to nearly 4.61 million. The December housing starts totaled at 5,50,000 far low as against the estimated 6,05,000. Crude oil futures for the month of February delivery grew by $0.12 to $43.67 per barrel on New York Mercantile Exchange. The crude futures moved up as there was news that White House would soon work on a new stimulus package.

The Dow Jones Industrial Average (DJIA) closed lower by 105.30 points at 8122.80 NASDAQ index lost by 41.58 points at 1,465.49 and the S&P 500 (SPX) also closed lower by 12.74 points at 827.50.

Indian ADRs ended lower. In technology sector, Satyam ended down by 2.73% along with Infosys by 4.53%. Further Patni Computers ended with decrease of 3.33% and Wipro closed lower by 5.93%. In banking sector ICICI Bank and HDFC Bank dropped by 3.72% and 2.37% respectively. In telecommunication sector, Tata Communication gained 0.48% while MTNL lost 3.42%. Sterlite Industries decreased by 0.60%.

Today major stock markets in Asia have opened negative. The Shanghai Composite is trading low by 3.98 points at 2,000.97. Hang Seng is up by 46.42 points at 12,704.41. Further Japan''s Nikkei is trading low by 184.43 points at 7,867.31. South Korea’s Seoul Composite is low by 18 points at 1,098.23 and Singapore’s Strait Times is also low by 2.66 points at 1,706.11.

The FIIs on Thursday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 866.40 Crore and gross debt purchased stood at Rs 114.73 Crore, while the gross equity sold stood at Rs 1628.70 Crore and gross debt sold stood at Rs 225.01 Crore. Therefore, the net investment of equity and debt reported were Rs (762.30) Crore and Rs (110.28) Crore respectively.

On Thursday, Indian Rupee closed at 49.13/16 per dollar, marginally weaker than Wednesday’s close of 49.11/13. The rupee weakened as Oil refineries bought huge dollars to pay off their bills.

On BSE, total number of shares traded were 24.22 Crore and total turnover stood at Rs 3,184.98 Crore. On NSE, total number of shares traded were 55.44 Crore and total turnover was Rs 8,552.87 Crore.

Top traded volumes on NSE Nifty – Unitech with 52104932 shares, Suzlon Energy with 15658456 shares, DLF with 14438351 shares, SAIL with total volume traded 11203311 shares followed by Hindalco with 9644449 shares.

On NSE Future and Options, total number of contracts traded in index futures was 892620 with a total turnover of Rs 11,332.01 Crore. Along with this total number of contracts traded in stock futures were 1257192 with a total turnover of Rs 11,293.23 Crore. Total numbers of contracts for index options were 1087805 with a total turnover of Rs 15,213.39 Crore and total numbers of contracts for stock options were 84508 and notional turnover was Rs 838.22 Crore.

Today, Nifty would have a support at 2,642 and resistance at 2,755 and BSE Sensex has support at 8,620 and resistance at 8,895.