Pre Session Commentary - Jan 27 2009

Today the markets are likely to have gap up opening. The sentiments are positive as the US markets closed in green amid expectations of stimulus. Also, the Asian market opened with gains. However Indian market was closed on Monday for Republic day holiday. Investors will closely watch RBI’s quarterly review of monetary policy today.

On Friday, the markets ended in red territory tracking grim cues from the markets all over the world. The opening was marginally lower due to selling by the foreign institutional investors along with huge selling in key benchmark indices led by weak global markets. Subdued start of European markets also weighed on the market sentiments. Though market tried to recover in early trade on account of energy giant Reliance Industries Ltd that rose on lower-than-expected drop in quarterly profit. However, market slipped again on intense selling activity being witnessed across board. Further market keeps tumbling and BSE Sensex closed below 8,700 mark and NSE Nifty below 2,700 level. Sectors like Bank, Metal, Capital Goods, Reality and IT closed with losses of 4.16%, 3.35%, 2.87%, 2.45% and 2.04% respectively. Mid caps and Small caps lost 1.56% and 1.50% respectively. On the other hand Pharma, Oil & Gas and Consumer Durables managed to remain in limelight with gains of 0.49%, 0.26%, and 0.08% respectively. During the session we expect the markets to exhibit some volatility ahead of RBI’s quarterly monetary policy today.

The BSE Sensex closed lower by 139.49 points at 8,674.35 and NSE Nifty ended down by 35.25 points at 2,678.55. The BSE Mid Caps and Small Caps ended with losses of 45.26 points and 49.41 points at 2,850.19 and 3,255.54 respectively. The BSE Sensex touched intraday high of 8,858.84 and intraday low of 8,631.60.

The US markets on Monday closed in green but off day''s high off day''s high. The multi-billion Pfizer-Wyeth deal, coupled with encouraging report on existing home sales and leading indicators pushed US shares higher. Market gained ground as investors eyed President Barack Obama''s stimulus plan weaving through Congress. US light crude oil for March delivery dropped 74 cents to close at $45.73 a barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed higher by 38.47 points at 8,166.03. NASDAQ index gained 12.17 points at 1,489.46 and the S&P 500 (SPX) also closed up by 4.62 points at 836.57.

Indian ADRs ended mostly up. In technology sector, Satyam ended up by 10.53% along with Infosys by 2.46%. Further Patni Computers ended with increase of 0.62% and Wipro closed higher by 1.66%. In banking sector ICICI Bank dropped by 1.08% while HDFC Bank gained 1.10%. In telecommunication sector, Tata Communication gained 2.62% and MTNL advanced by 1.39%. Sterlite Industries decreased by 0.61%.

Today among major stock markets in Asia, only Nikkei is trading while all other Asian markets are closed due to Lunar New Year. Markets in Singapore and South Korea will reopen on Wednesday. Hong Kong''s markets will reopen on Thursday. Japan’s Nikkei is trading with gain of 3.49% at 7,950.07.

The FIIs on Friday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 1207.50 Crore and gross debt purchased stood at Rs 1170.40 Crore, while the gross equity sold stood at Rs 1458.80 Crore and gross debt sold stood at Rs 1332.60 Crore. Therefore, the net investment of equity and debt reported were Rs (251.30) Crore and Rs (162.20) Crore respectively.

On Friday, Indian Rupee ended at 49.27/29 per USD, 0.3% weaker than previous close of 49.13/16. Rupee lost its strength as concerns of rising risk aversion among investors weighed on sentiment due to loss in domestic stock market, along with a broad dollar rally against major currencies also weighed.

On BSE, total number of shares traded were 33.31 Crore and total turnover stood at Rs 3,325.55 Crore. On NSE, total number of shares traded were 68.39 Crore and total turnover was Rs 8,458.87 Crore.

Top traded volumes on NSE Nifty – Unitech with 52951024 shares, Suzlon Energy with 12403760 shares, SAIL with 11482752 shares, DLF with total volume traded 11112282 shares followed by ICICI Bank with 10743196 shares.

On NSE Future and Options, total number of contracts traded in index futures was 838837 with a total turnover of Rs 10,546.08 Crore. Along with this total number of contracts traded in stock futures were 1234770 with a total turnover of Rs 10,764.96 Crore. Total numbers of contracts for index options were 1061649 with a total turnover of Rs 14,641.96 Crore and total numbers of contracts for stock options were 92950 and notional turnover was Rs 856.98 Crore.

Today, Nifty would have a support at 2,652 and resistance at 2,743 and BSE Sensex has support at 8,590 and resistance at 8,968.