Pre Session Commentary - Jan 9 2009

Today the markets are likely to open positive, as we expect little bounce back after a drastic fall on Wednesday session. The fear and negative sentiments have once again afflicted investor at large numbers and hence a major bounce back is still far. On the macro economic perspective the inflation numbers to be announced today may influence the markets sentiments to some extent. Today’s session, one may witness some extreme volatility amidst selling pressures.

On Wednesday, the markets crashed the worst ever in the past a few weeks. The sentiments were weak since the post morning session, which further deteriorated further. The fire of selling pressure was ignited by Satyam after its Chairman Mr. Ramlinga Raju admitted the fraud of Rs 5000 crore plus due to inflated bottom margins over many years. The stock plummeted a drastic 77.69% to close at Rs 39.95 after touching a low at Rs 30.70 in BSE. Further sectors like Realty, Oil & Gas, IT and Bankex were brutally shattered as they lost by 16.95%, 9.35%, 9.32% and 8.06% respectively. Sensex and Nifty lost by 7.25% and 6.18% respectively. On the other hand, Mid caps and Small caps were also thrashed as they lost 7.17% and 6.29% respectively. During the session we expect the markets to be trading highly volatile.

The BSE Sensex closed lower by 749.05 points at 9,586.88 and NSE Nifty ended lower by 192.40 points at 2,920.40. The BSE Mid Caps and Small Caps ended with losses of 247.05 points and 246.03 points at 3,197.91 and 3,662.52 respectively. The BSE Sensex touched intraday high of 10,469.72 and intraday low of 9,510.15.

On Thursday, the US markets closed mixed. The Wart Mart’s lower fourth quarter outlook caused a cautious trading ahead of the unemployment data to be released today. Wal-Mart has shaved more than a dime from its fourth quarter earnings outlook, which now ranges from $0.91 to $0.94 per share. Wall Street was expecting $1.06 per share for the quarter. The company further disappointed the investors by announcing December same-store sales increased by a less-than-expected 1.7%. On the other hand, economists expect December non-farm payrolls to show a decline of 545,000 jobs. Crude oil futures for the month of February delivery fell marginally by $0.93 to $41.70 per barrel on New York Mercantile Exchange. The dwindling energy demand across the world is a major concern in this economic turmoil.
The Dow Jones Industrial Average (DJIA) closed lower by 27.24 points at 8,742.46 NASDAQ index gained 17.95 points at 1,617.01 and the S&P 500 (SPX) also closed higher by 3.08 points to close at 909.73.

Indian ADRs ended mixed. In technology sector, Infosys lost 1.11% while Satyam remained unchanged. Further Patni Computers ended with decrease of 3.45% and Wipro closed down by 2.54%. In banking sector ICICI Bank dropped by 0.94% whereas HDFC Bank gained 0.18%. In telecommunication sector, Tata Communication lost 3.49% and MTNL declined by 5.23%. Sterlite Industries increased by 1.13%.

Today the major stock markets in Asia have opened mixed. The Shanghai Composite is trading high by 5.34 points at 1,883.52 while Hang Seng is high by 73.99 points at 14,489.90. Further Japan''s Nikkei is low by 83.70 points at 8,792.72. South Korea’s Seoul Composite is low by 18.27 points at 1,187.43 and Singapore’s Strait Times is high by 10.54 points at 1,838.15.

The FIIs on Wednesday stood as net buyer in equity and net sellers in debt. Gross equity purchased stood at Rs 2389.90 Crore and gross debt purchased stood at Rs 403.40 Crore, while the gross equity sold stood at Rs 1945.10 Crore and gross debt sold stood at Rs 420.40 Crore. Therefore, the net investment of equity and debt reported were Rs 444.80 Crore and Rs (17.00) Crore respectively.

On Wednesday, Indian Rupee closed at 48.80/81 per dollar, 03% weaker than Tuesday’s close of 48.66/69. The rupee traded range bound for the day as there was good demand for dollar from some large companies.

On BSE, total number of shares traded were 57.58 Crore and total turnover stood at Rs 5,831.85 Crore. On NSE, total number of shares traded were 125.99 Crore and total turnover was Rs 15,509.18 Crore.

Top traded volumes on NSE Nifty – Satyam with 330164149 shares, Unitech with 80289320 shares, Suzlon Energy with total volume traded 60140875 shares, ICICI Bank with 19189173 shares followed by SAIL with 17824328 shares.

On NSE Future and Options, total number of contracts traded in index futures was 1332039 with a total turnover of Rs 18,480.07 Crore. Along with this total number of contracts traded in stock futures were 1715697 with a total turnover of Rs 15,542.17 Crore. Total numbers of contracts for index options were 1574422 with a total turnover of Rs 24,115.96 Crore and total numbers of contracts for stock options were 135139 and notional turnover was Rs 1416.99 Crore.

Today, Nifty would have a support at 2,819 and resistance at 2,943 and BSE Sensex has support at 9,238 and resistance at 9,695.