Pre Session Commentary - Jan 30 2009

Today domestic markets are likely to open negative as the US markets closed in negative yesterday and the Asian markets have also opened with a blood bath. The inflation numbers were worse than expected as it recorded at 5.64%. The government on the other hand has softened the FDI ceilings to encourage more foreign capital inflow. However apart from also such news, the markets sentiments are weak and therefore one could see extreme volatility in the today’s trade.

On Thursday, the markets ended negative after a choppy trade. Despite the other Asian markets closing at green, the domestic markets could not sustain the firmness and selling pressure emanated after the inflation numbers for the week ended Jan 17 grew up to 5.64% as against 5.60% in the week earlier. The markets pared off the early gains of the morning session and stocks at broader were thrashed. Sectors like Realty, CG and Power closed with losses of 2.77%, 2.01% and 1.27% respectively. Sectors like Auto, IT, Metal and Bankex sustained their firmness and managed to close up by 1.34%, 1.04%, 0.44% and 0.30% respectively. Mid caps and Small caps also fell by 0.39% and 0.05% respectively. During the session we expect the markets to be trading volatile with negative bias.

The BSE Sensex closed low by 21.19 points at 9,236.28 and NSE Nifty lost by 25.55 points at 2,823.95 The BSE Mid Caps and Small Caps ended with losses of 11.36 points and 1.57 points at 2,903.44 and 3,303.41 respectively. The BSE Sensex touched intraday high of 9,379.68 and intraday low of 9,164.96.

The US markets on Thursday closed in red after four days of gain as US new-home sales fell to all-time low. There was mixed earning announcements from the corporate houses and the investors booked profits to escape any uncertainty. New-home sales tumbled 14.7% and initial jobless claims rose by 3000 to 5.88 lakh. Further many investors would be waiting for tomorrow estimate about the prospects of fourth Quarter GDP. There are estimates that the annual decline in GDP numbers would be a drastic 5.5%. Crude oil futures for the month of Mach delivery fell $0.72 to $41.44 per barrel on New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed lower by 226 points at 8,149. NASDAQ index lost 50.50 points at 1,508 and the S&P 500 (SPX) tumbled 29 points at 845.

Indian ADRs ended down. In technology sector, Satyam ended down by 9.57% along with Wipro by 4.37%. Further Patni Computers ended with decrease of 2.49% and Infosys closed lower by 2.07%. In banking sector ICICI Bank and HDFC Bank dropped by 6.30% and 6.15% respectively. In telecommunication sector, Tata Communication and MTNL lost 3.51% and 2.03% respectively. Sterlite Industries decreased by 4.41%.

Today major stock markets in Asia have opened negative. Japan''s Nikkei slipped 276.19 points at 7,975.05 along with Hong Kong''s Hang Seng that plunged 157.71 points at 12,996.72.. South Korea''s Seoul Composite is down by 5.99 points at 1,160.57 and Singapore''s Strait Times dropped by 21.99 at 1,160.57.

The FIIs on Thursday stood as net buyers in equity and debt. Gross equity purchased stood at Rs 1,588.80 Crore and gross debt purchased stood at Rs 652.50 Crore, while the gross equity sold stood at Rs 1,563.60 Crore and gross debt sold stood at Rs 650.50 Crore. Therefore, the net investment of equity and debt reported were Rs 25.20 Crore and Rs 2.10 Crore respectively.

On Thursday, Indian Rupee closed at 48.98/99 per dollar, 0.1% weaker as compared to Wednesday’s close at 48.93/94. The rupee fell as domestic stocks market tumbled thus raising concerns of foreign capital outflow.

On BSE, total number of shares traded were 38.49 Crore and total turnover stood at Rs 3,825.19 Crore. On NSE, total number of shares traded were 90.82 Crore and total turnover was Rs 11,620.64 Crore.

Top traded volumes on NSE Nifty – Unitech with 106472291 shares, Suzlon Energy with 42165980 shares, DLF with 15631527 shares, SAIL with total volume traded 13335215 shares followed by NTPC with 12174912 shares.

On NSE Future and Options, total number of contracts traded in index futures was 1044891 with a total turnover of Rs 13,935.58 Crore. Along with this total number of contracts traded in stock futures were 1758450 with a total turnover of Rs 16,609.28 Crore. Total numbers of contracts for index options were 1384858 with a total turnover of Rs 19,866.25 Crore and total numbers of contracts for stock options were 147315 and notional turnover was Rs 1,248.50 Crore.

Today, Nifty would have a support at 2,755 and resistance at 2,838 and BSE Sensex has support at 9,029 and resistance at 9,278.