Pre Session Commentary - Jan 6 2009

Today the markets are likely to open positive as most of the other Asian markets are trading in green. The US markets have shed marginal loss and closed in red, however the domestic sentiments have shown some firmness in yesterday’s trade. Today one could witness some selling pressures as in the last trading days the bourses have gained enough strength. The domestic economic scenario seems to be positive and the sentiments have also exuded some relative strength. The global economic factors would have little impact on the domestic flow of markets. Despite the positive cues the volatility is likely to creep in today’s trade however with a positive bias.

On Monday, the markets opened with a positive gap and maintained its firmness till the end. Towards the end the sentiments gained enough strength to push the markets above 10300 levels. The stimulus package seemed to have worked in building the positive atmosphere across domestic financial markets. The bulls were also supported by the positive sentiments prevailing across other Asian markets and European markets. All the Asian markets closed in green, whereas in European markets except the CAC 40 all other markets closed in green. In the domestic arena, sectors like Metal, Oil & Gas, Bankex, CG and IT kept the charm of the markets with phenomenal gains of 5.54%, 5.10%, 3.53%, 2.83% and 2.40% respectively. Sensex and Nifty gained 3.19% and 2.45% respectively. During the session we expect the markets to be trading volatile with positive bias.

The BSE Sensex closed higher by 317.38 points at 10,275.60 and NSE Nifty ended higher by 74.70 points at 3,121.45. The BSE Mid Caps and Small Caps ended with gains of 60.46 points and 46.92 points at 3,451.64 and 3,917.37 respectively. The BSE Sensex touched intraday high of 10,306.17 and intraday low of 10,069.11.

On Monday, the US markets closed in red. Despite there is news that the tax cut making could be $300 billion, the markets couldn’t sustain its charm of the previous week. Consumer spending is of particular concern to economists since it accounts for nearly 70% of U.S. economic activity. Therefore an effort to stimulate spending is being taken and Federal Reserve plans to spur consumer lending, and now President-Elect Obama is putting together $300 billion in tax cuts for individuals. On the other hand, total construction spending fell 0.6% in December, which isn’t as bad as the 1.4% drop that was widely expected. US light crude oil for February delivery rose $2.47 to settle at $48.81 a barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed down with 81.80 points at 8,952.89 NASDAQ index lost 4.18 points at 1,628.03 and the S&P 500 (SPX) also closed lower by 4.35 points to close at 1,628.03 points.

Indian ADRs ended mixed. In technology sector, Infosys gained by 3.34% and Patni Computers gained by 1.68%, further Wipro ended with a loss of 0.72% and Satyam closed high by 0.11%. In banking sector ICICI Bank gained 1.89% while HDFC Bank lost 3.69%. In telecommunication sector, Tata Communication gained by 3.84%, while MTNL declined by 2.51%.

Today the major stock markets in Asia have opened positive. The Shanghai Composite is trading high by 25 points at 1,905.72 while Hang Seng is flat at 15,567.43. Further Japan''s Nikkei is high by 101.55 points at 9,144.67. South Korea’s Seoul Composite is high by 26.18 points at 1,199.75 and Singapore’s Strait Times is high by 5.48 points at 1,930.35.

The FIIs on Monday stood as net buyer in equity and debt. Gross equity purchased stood at Rs 832.00 Crore and gross debt purchased stood at Rs 2120.00 Crore, while the gross equity sold stood at Rs 718.00 Crore and gross debt sold stood at Rs 119.30 Crore. Therefore, the net investment of equity and debt reported were Rs 114.00 Crore and Rs 2000.70 Crore respectively.

On Monday, Indian Rupee for the day of the year closed at 48.56 per dollar as compared to Friday’s close of 48.58/60. The rupee in its early trade had rallied to 48.15 on the back of monetary ease announced by RBI on Friday evening.

On BSE, total number of shares traded were 39.23 Crore and total turnover stood at Rs 4,188.28 Crore. On NSE, total number of shares traded were 80.89 Crore and total turnover was Rs 10,884.82 Crore.

Top traded volumes on NSE Nifty – Unitech with 94815809 shares, Suzlon Energy with total volume traded 30113714 shares, Satyam with 24865442 shares followed by Reliance Petro with 17997020 shares and SAIL with 16940776 shares.

On NSE Future and Options, total number of contracts traded in index futures was 725405 with a total turnover of Rs 10,356.46 Crore. Along with this total number of contracts traded in stock futures were 946349 with a total turnover of Rs 10,064.32 Crore. Total numbers of contracts for index options were 821519 with a total turnover of Rs 12,810.20 Crore and total numbers of contracts for stock options were 87653 and notional turnover was Rs 988.33 Crore.

Today, Nifty would have a support at 3,089 and resistance at 3,174 and BSE Sensex has support at 10,145 and resistance at 10,492.