Pre Session Commentary - Feb 12 2009

Today domestic markets are likely to open negative as all the Asian markets have opened with blood bath. Yesterday the US markets closed in green after the announcement of a bail out package of $ 789 billion. However the Asian markets could not take the US bail out plan in a positive spirit. The sentiments are still weak as there is no specific news for the support. The domestic markets have shown a good comeback on yesterday’s trade after an early downfall thus giving cues of a strong support level despite the lack of economic news. One could anticipate a range bound trade today until the IIP and Inflation numbers is declared, which may swing the markets in either ways. There are anticipations of better number for the IIP and Inflation and therefore one could expect some trend after the post mid session.

On Wednesday, the markets opened with a negative gap but later managed to pare off its losses. The trauma across the world markets due to lackluster US markets caused early havoc in the domestic sentiments as well, however some buying on the frontline stocks helped the benchmark indices to pare off its early losses. The cues from other Asian and European markets were also discouraging as they were trading in deep red. The US bail out package details could not pacify the anxiety of investors across the globe. To some extent domestic markets however showed their relative strength and therefore investors exuded a lot of confidence on topline and second rung bourses. Sectors like Auto, CD, Power and FMCG managed to close in green by 0.80%, 0.25%, 0.20% and 0.17% respectively. Mid caps and Small caps also gained 0.37% and 0.25% respectively. During the session we expect the markets to be trading positive despite a negative opening.

The BSE Sensex closed low by 28.93 points at 9,618.54 and NSE Nifty ended with a marginal loss of 8.80 points at 2,925.70. The BSE Mid Caps and Small Caps ended with gains of 10.89 points and 8.45 points at 2,965.14 and 3,350.97 respectively. The BSE Sensex touched intraday high of 9,648.39 and intraday low of 9,459.59.

The US markets on Wednesday closed in green. The US senate and House of Representatives have agreed on a bail out package of $ 789.5 billion that finally lifted the morale of investors. The further sign of improvement on initiatives to stimulate the economy prompted Short sellers to cover up their positions. The financial stocks we in the lime light as the sector gained the highest 5.2%. Energy stocks were the poorest performers as the crude prices were hammered badly. The sector fell by 1.3% during the day’s trade. US light crude oil for March delivery fell by $1.75 to settle at $35.80 a barrel on the New York Mercantile Exchange. Crude prices were shattered by a larger-than-expected inventory build and a reduced forecast for global oil demand from the IEA. While crude oil prices dropped, Gold registered impressive gains for the second straight session and closed at $944.50 per ounce, up by 3% to its highest level in more than six months.

The Dow Jones Industrial Average (DJIA) closed up by 50.65 points at 7,939.53. NASDAQ index gained 5.77 points at 1,530.50 and the S&P 500 (SPX) gained 6.58 points at 833.74.

Indian ADRs ended in mixed. In technology sector, Infosys ended lower by 0.44% along with Wipro by 1.48%. Further, Satyam ended with increase of 16.23% while Patni Computers closed down by 3.33%. In banking sector ICICI Bank and HDFC Bank gained 3.92% and 3.78% respectively. In telecommunication sector, MTNL dropped by 4.07% while Tata Communication plunged 0.17%. Sterlite Industries decreased by 0.18%.

Today major stock markets in Asia have opened negative. Shanghai composite is down by 39.80 points to 2,221.02, Japan''s Nikkei is also low by 186.27 points at 7,759.67. Hang Seng fell 283.73 points at 13255.48, South Korea''s Seoul Composite is low by 20.83 points at 1,169.35 and Singapore''s Strait Times is low by 16.72 points to 1,705.25.

The FIIs on Wednesday stood as net buyers in equity and debt. Gross equity purchased stood at Rs 1,695.20 Crore and gross debt purchased stood at Rs 117.50 Crore, while the gross equity sold stood at Rs 1,279.00 Crore and gross debt sold stood at Rs 117.00 Crore. Therefore, the net investment of equity and debt reported were Rs 416.10 Crore and Rs 0.40 Crore respectively.

On Wednesday, the Indian rupee closed at 48.69/70, 0.03 paise stronger than its previous close of 48.72/73. The waning importer’s demand for dollar and the end session recovery of stock markets helped rupee gain strength.

On BSE, total number of shares traded were 33.23 Crore and total turnover stood at Rs 3,280.70 Crore. On NSE, total number of shares traded were 70.47 Crore and total turnover was Rs 83.40 Crore.

Top traded volumes on NSE Nifty – Unitech with 76696683 shares, Suzlon Energy with 18964912 shares, DLF with 14985947 shares, SAIL with total volume traded 14396217 shares followed by Reliance Comm with 12171052 shares.

On NSE Future and Options, total number of contracts traded in index futures was 736295 with a total turnover of Rs 9,881.97 Crore. Along with this total number of contracts traded in stock futures were 915096 with a total turnover of Rs 8,514.02 Crore. Total numbers of contracts for index options were 941961 with a total turnover of Rs. 13,732.74 Crore and total numbers of contracts for stock options were 73227 and notional turnover was Rs 859.65 Crore.

Today, Nifty would have a support at 2,891 and resistance at 2,987 and BSE Sensex has support at 9,552 and resistance at 9,709.