Pre Session Commentary - Jan 29 2009

Today domestic markets are likely to open with a positive gap as the US markets have closed in green on the back of US stimulus package. Like yesterday, the global conducive environment would once again boost the domestic morale of investors on today’s trade. The US House of Representatives has passed $825 billion economic stimulus plan. The other Asian markets have also opened in green. The European markets on yesterday’s trade exuded enough strength that paved way for a firm trade in the domestic and Asian markets as well. The ministry of petroleum has reduced the prices of petrol by Rs.5 per litre, diesel by Rs.2 per litre and cooking gas by Rs.25 per cylinder. This pre poll step would further soften the inflationary pressures in future. The overall atmosphere is agile for a good trend today.

On Wednesday, the markets ended with phenomenal gains. The sentiments looked strong for the second consecutive day of the week on the back of steady trend across other Asian markets like Nikkei, Seoul Composite and Strait Times. The European markets also exuded phenomenal buying sentiments and therefore all the European markets closed in green. Dax, CAC and FTSE have all gained remarkably. Global factor played a crucial role in uplifting the domestic market sentiments till the end. In the domestic arena, sectors like Realty, Metal, Bankex, Oil & Gas and PSU closed with phenomenal gains of 6.32%, 4.44%, 3.79%, 3.76% and 3.12% respectively. The rest of the sectors also managed to close in green. Mid caps and Small caps were also in the lime light as they gained 1.64% and 1.18% respectively. During the session we expect the markets to be trading positive.

The BSE Sensex closed up by 253.39 points at 9,257.47 and NSE Nifty gained by 78.15 points at 2,849.50. The BSE Mid Caps and Small Caps ended with gains of 46.93 points and 38.44 points at 2,914.80 and 3,304.98 respectively. The BSE Sensex touched intraday high of 9,270.75 and intraday low of 9,053.80.

The US markets on Wednesday closed in green. The investors were optimistic about the US House of Representatives to come up with a stimulus package. The government is expected to create a "bad bank" that will purchase risky assets from existing banks. The strategy of divesting risky assets would help banks protect against further asset write-downs, and increase cash on their books. That would help limit the need to raise additional capital, which can be dilutive to shareholders. On the other hand as expected the Federal Open Market Committee left its fed funds target rate unchanged at 0.00% to 0.25%.

The Dow Jones Industrial Average (DJIA) closed higher by 200.72 points at 8,375.45 NASDAQ index gained by 53.44 points at 1,558.34 and the S&P 500 (SPX) also closed higher by 28.38 points at 874.09.

Indian ADRs ended higher. In technology sector, Satyam ended up by 10% along with Patni Computers by 12.40%. Further Infosys ended with increase of 3.43% and Wipro closed up by 5.17%. In banking sector ICICI Bank and HDFC Bank advanced by 15.02% and 8.49% respectively. In telecommunication sector, MTNL and Tata Communication gained 2.78% and 4.26% respectively. Sterlite Industries increased by 1.49%.

Today major stock markets in Asia have opened positive. The Shanghai Composite and Hang Seng are closed due to New Year celebration. However Japan''s Nikkei is trading high by 73.89 points at 8,180.18. South Korea’s Seoul Composite is high by 8.34 points at 1,166.32 and Singapore’s Strait Times is flat at 1,765.45.

The FIIs on Wednesday stood as net sellers in equity and net buyers in debt. Gross equity purchased stood at Rs 1359.00 Crore and gross debt purchased stood at Rs 142.20 Crore, while the gross equity sold stood at Rs 1,598.70 Crore and gross debt sold stood at Rs 50 Crore. Therefore, the net investment of equity and debt reported were Rs (239.70) Crore and Rs 92.20 Crore respectively.

On Wednesday, Indian Rupee closed at 48.93/94 per dollar, trading flat as compared to Tuesday’s close at 48.94/95. The rupee closed flat as the demand for dollar by importers during the month end had offset the positive influence of expectations of foreign capital inflow in the surging domestic stock markets.

On BSE, total number of shares traded were 32.24 Crore and total turnover stood at Rs 3,606.74 Crore. On NSE, total number of shares traded were 73.61 Crore and total turnover was Rs 9,763.64 Crore.

Top traded volumes on NSE Nifty – Unitech with 81922348 shares, Suzlon Energy with 27497391 shares, Tata Steel with 15780317 shares, SAIL with total volume traded 14735900 shares followed by Rcom with 13184403 shares.

On NSE Future and Options, total number of contracts traded in index futures was 846481 with a total turnover of Rs 11,268.55 Crore. Along with this total number of contracts traded in stock futures were 1586125 with a total turnover of Rs 14,256.84 Crore. Total numbers of contracts for index options were 991214 with a total turnover of Rs 14,230.56 Crore and total numbers of contracts for stock options were 115796 and notional turnover was Rs 1,138.29 Crore.

Today, Nifty would have a support at 2,865 and resistance at 2,930 and BSE Sensex has support at 9,280 and resistance at 9,421.