Pre Session Commentary - Feb 13 2009

Today domestic markets are likely to open positive and bounce back as Asian markets have opened in green. The US markets have also showed some sign of recovery from its early losses as the US government is likely to come out with a plan to backup the mortgage industry. The inflation numbers were good as it fell further to 4.39% during the week ended January 31 from 5.07% a week earlier. As the railway budget is likely to create a feel good factor ahead of interim budget one may witness some trend in today''s trade.

On Thursday, the markets opened with a negative gap on the back of weak cues from other Asian markets, which was further dragged by the poor IIP data. The sentiments across the markets were not encouraging since the opening bell as investors were just waiting with sheer fear of the IIP data. After the IIP data was announced during the mid session, the markets were engulfed by the fire of pessimism and selling pressure. The IIP data for the month of December was worst than expected as it contracted by 2% against a 8% growth witnessed in December 2007. Manufacturing production fell by 2.5%. The WPI index for the week ended Jan 31 has relaxed to 4.39% as against 5.07% recorded in the previous year. Sectors like IT, Teck, Oil & Gas, CG and Bankex were brutally slaughtered as they lost 2.46%, 2.27%, 1.85%, 1.30% and 1.15% respectively. On the other hand Realty and Auto made remarkable gains of 1.30% and 0.94% respectively. Mid caps and Small caps managed to shield the heat as investors resorted to bottom fishing. The indices gained 0.10% and 0.71% respectively. During the session we expect the markets to be trading positive. The market will take further directions as the interim Rail budget is scheduled later today. Lalu Prasad Yadav is expected to present the railway budget, by slashing some passenger fares and announcing of some new trains.

The BSE Sensex closed low by 152.71 points at 9,465.83 and NSE Nifty ended with a loss of 32.65 points at 2,893.05. The BSE Mid Caps and Small Caps ended with gains of 2.97 points and 23.82 points at 2,968.11 and 3,374.79 respectively. The BSE Sensex touched intraday high of 9,580.13 and intraday low of 9,445.54.

Thursday, the US stock markets bounced late in the session and closed in mixed on the back of a report that the U.S. government is considering a new plan to subsidize mortgage payments for homeowners, helping troubled banks such as Bank of America and Citigroup pare their losses. Further some better than expected economic reports and earnings results also led the markets to rally in the last hour of trading. US light crude oil for March delivery fell by $1.96 to settle at $33.98 a barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) dropped by 6.77 points to close at 7,932.76. The NASDAQ Composite (RIXF) index increased by 11.21 points to close at 1,541.71 and the S&P 500 (SPX) grew by 1.45 points to close at 835.19.

Indian ADRs ended mostly higher. In technology sector, Wipro ended up by 2.55% along with Infosys by 0.30%. Further, Satyam ended with decrease of 4.47% and Patni Computers closed down by 7.41%. In banking sector HDFC Bank and ICICI Bank gained 2.68% and 0.23% respectively. In telecommunication sector, MTNL and Tata Communication advanced by 1.89% and 3.18% respectively. Sterlite Industries increased by 0.92%.

Today major stock markets in Asia are trading up. Shanghai composite is higher by 16.3 points to 2,264.40, Japan''s Nikkei is also up by 113.60 points at 7,818.96. Hang Seng gained 193.84 points at 13,422.14, South Korea''s Seoul Composite is up by 4.28 points at 1,184.12 and Singapore''s Strait Times is higher by 16.26 points to 1,701.22.

The FIIs on Thursday stood as net sellers in equity and net sellers in debt. Gross equity purchased stood at Rs 920.10 Crore and gross debt purchased stood at Rs 1,020.60 Crore, while the gross equity sold stood at Rs 1,034.30 Crore and gross debt sold stood at Rs 560.00 Crore. Therefore, the net investment of equity and debt reported were Rs (114.20) Crore and Rs 460.60 Crore respectively.

On Thursday, the Indian rupee closed at 48.85/86, 0.3% weaker than its previous close of 48.69/70. The rupee depreciated as Dollar stood stronger than other currencies across the world and the domestic stock markets plummeted due to worse IIP data.

On BSE, total number of shares traded were 34.83 Crore and total turnover stood at Rs 3,212.26 Crore. On NSE, total number of shares traded were 68.09 Crore and total turnover was Rs 7995.29 Crore.

Top traded volumes on NSE Nifty – Unitech with 66039458 shares, DLF with 18571261 shares, Suzlon Energy with 14226360 shares, SAIL with total volume traded 11300421 shares followed by Reliance Comm with 10467244 shares.

On NSE Future and Options, total number of contracts traded in index futures was 712214 with a total turnover of Rs 9,560.62 Crore. Along with this total number of contracts traded in stock futures were 868601 with a total turnover of Rs 8,149.89 Crore. Total numbers of contracts for index options were 883369 with a total turnover of Rs. 12,950.11 Crore and total numbers of contracts for stock options were 70520 and notional turnover was Rs 763.79 Crore.

Today, Nifty would have a support at 2,881 and resistance at 2,957 and BSE Sensex has support at 9,402 and resistance at 9,602.