Pre Session Commentary - Feb 11 2009

Today domestic markets are likely to open with a negative gap as US markets closed with huge losses and the other Asian markets have also opened with heavy blood bath. The stimulus package of $ 838 billion by the US treasury could not lift the sentiments of investors as there was no clarity on the bill. The other Asian markets have also reacted pessimistically towards the downfall witnessed on the US markets and therefore one can anticipate the domestic markets to shed its gains buildup on previous sessions. The selling pressure could be immense during the early trading hours of today’s session.

On Tuesday, the markets opened shy and traded volatile. The sentiments were weak and cautious since the opening bell, however for most of the time it managed to trade in the northwards. After the brutal opening of the European markets, the sentiments across the domestic markets started shattering. At the later session some buying of frontline stocks helped the markets to close in green with marginal gain. Sectors like Realty, CG, Bankex, HC and Auto gained 6.58%, 3.14%, 1.16%, 1.14% and 1% respectively. Mid caps and Small caps also gained 0.76% and 0.29% respectively. During the session we expect the markets to be trading negative.

The BSE Sensex closed up by 63.58 points at 9,647.47 and NSE Nifty ended with gains of 14.60 points at 2,934.50. The BSE Mid Caps and Small Caps ended with gains of 22.30 points and 9.81 points at 2,954.25 and 3,342.52 respectively. The BSE Sensex touched intraday high of 9,724.87 and intraday low of 9,510.50.

The US markets on Tuesday closed with heavy losses. The sentiments were very bearish on the US markets as the Treasury bill failed to provide the details that could have uplifted the investors’ sentiments. The bill worth $ 838 billion could not pump the confidence among the investors as they had expected. However the Treasury along with Fed, FDIC, and private sector will establish a public-private investment fund to provide capital and financing to help leverage private capital to get private markets working. There is a range of different structures for this program, but Treasury believes it should ultimately provide up to $1 trillion in financing capacity. US light crude oil for March delivery fell by $2.01 to settle at $37.55 a barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed low by 381.99 points at 7,888.88. NASDAQ index lost 66.83 points at 1,524.73 and the S&P 500 (SPX) plummeted 42.43 points at 827.16.

Indian ADRs ended in red. In technology sector, Infosys ended lower by 7.60% along with Wipro by 5.58%. Further, Patni Computers ended with increase of 3.09% while Satyam closed down by 12.50%. In banking sector ICICI Bank and HDFC Bank lost 5.95% and 7.48% respectively. In telecommunication sector, MTNL advanced by 4.24% while Tata Communication lost 3.53%. Sterlite Industries decreased by 3.19%.

Today major stock markets in Asia have opened negative. Shanghai composite is down by 12.75 points to 2,252.41, Japan''s Nikkei is also low by 23.09 points at 7,945.94. Hang Seng fell 436.76 points at 13,443.88. South Korea''s Seoul Composite is low by 21.57 points at 1,177.30 and Singapore''s Strait Times is low by 5.69 points to 1,697.60.

The FIIs on Tuesday stood as net buyers in equity and net sellers in debt. Gross equity purchased stood at Rs 1,293.70 Crore and gross debt purchased stood at Rs 840.40 Crore, while the gross equity sold stood at Rs 1,004.60 Crore and gross debt sold stood at Rs 845.70 Crore. Therefore, the net investment of equity and debt reported were Rs 289.10 Crore and Rs (5.20) Crore respectively.

On Tuesday, the Indian rupee closed at 48.72/73, 0.3% weaker than its previous close of 48.57/58. The volatile domestic stock markets and overseas rally in dollar pulled the rupee.

On BSE, total number of shares traded were 35.40 Crore and total turnover stood at Rs 3,726.87 Crore. On NSE, total number of shares traded were 72.63 Crore and total turnover was Rs 97.24 Crore.

Top traded volumes on NSE Nifty – Unitech with 115522052 shares, DLF with 24050943 shares, Suzlon Energy with 18658502 shares, SAIL with total volume traded 12496162 shares followed by Reliance Comm with 11654716 shares.

On NSE Future and Options, total number of contracts traded in index futures was 851535 with a total turnover of Rs 11,529.36 Crore. Along with this total number of contracts traded in stock futures were 1080229 with a total turnover of Rs 9,797.48 Crore. Total numbers of contracts for index options were 1152004 with a total turnover of Rs. 16,822.93 Crore and total numbers of contracts for stock options were 88480 and notional turnover was Rs 868.14 Crore.

Today, Nifty would have a support at 2,859 and resistance at 2,903 and BSE Sensex has support at 9,383 and resistance at 9,556.