Pre Session Commentary - Feb 18 2009

Today domestic markets are once again likely to open negative as the major Asian markets have also opened with blood bath. The US markets followed the fall of other markets and today once again the bearish trend has prevailed across Asian markets. The US, Europe and Japan seems to have fallen into a synchronized recession, causing further concerns for emerging markets like India and China. The sentiments are weak across the globe and the domestic markets are likely to follow the trend of other markets. Therefore today one could witness the markets moving into the southward once again.

On Tuesday, the markets opened with brutal losses. The sentiments were weak as investors were carrying resentment of yesterday’s poor interim budget presentation. Besides, the blood bath opening of Asian markets also added fuel to the fire of bearishness. European markets like DAX, FTSE and CAC were also trading in deep red. The bears are have clawed the markets across the world and there is no sign of recovery in the present scenario. In the domestic arena, heavy selling was witnessed across broader markets as the benchmark indices kept plunging in deep red. Sectors like Realty, CD, Bandex, Metal and IT as they fell drastically by 4.85%, 4.80%, 4.41%, 3.98% and 3.24% respectively. Mid caps and Small caps fell 2.31% and 2.35% respectively. During the session we expect the markets to be trading negative.

The BSE Sensex closed low by 270.45 points at 9,035 and NSE Nifty ended with a loss of 78 points at 2,770.50. The BSE Mid Caps and Small Caps ended with losses of 67.63 points and 78.15 points at 2,857.12 and 3,245.99 respectively. The BSE Sensex touched intraday high of 9,213.40 and intraday low of 8,994.34.

On Tuesday, the US stock markets ended in deep red. The weakness observed across all the other markets in Asia and Europe brought down the sentiments of investors in US as well. Financials were hit hard as the sector closed 9.8% lower with weakness in consumer finance (-11.9%), diversified financial companies (-12.2%), and diversified banks (-13.1%). The sector also registered a new 52-week intraday low and a new 52-week closing low. Another sector that is into deep worry is the Auto sector. The Auto sales have also fallen drastically by nearly half and therefore the lamenting sector seeks a bailout package from the US government. Crude oil for March delivery fell by a drastic 7% to close at $ 34.95 a barrel on the New York Mercantile Exchange. The price of Crude oil has plummeted on concerns of economic slowdown and hence repercussion in demand of oil. On the other hand, Gold inclined by 3.2% to close at $ 971.30 per ounce.

The Dow Jones Industrial Average (DJIA) dropped by 297.81 points to close at 7,552.60 The NASDAQ Composite (RIXF) index fell by 63.70 points to close at 1,470.66 and the S&P 500 (SPX) lost by 37.67 points to close at 789.17.

Indian ADRs ended down. In technology sector, Satyam ended lower by 6.81%. Further, Wipro ended with decrease of 6.65%. Further, Infosys lost 4.89% and Patni Computers closed down by 8.75%. In banking sector ICICI HDFC Bank and HDFC Bank lost 13.63% and 7.72% respectively. In telecommunication sector, MTNL and Tata Communication dropped by 7.41% and 11.13% respectively. Sterlite Industries decreased by 10.91%.

Today major stock markets in Asia are trading negative. Shanghai composite is lower by 63.23 points to 2,256.21, Japan''s Nikkei is low by 96.38 points at 7,549.13. Hang Seng lost 200.42 points at 12,744.98, South Korea''s Seoul Composite is low by 14.66 points at 1,112.53 and Singapore''s Strait Times is lower by 0.14 points to 1,637.78.

The FIIs on Tuesday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 685.70 Crore and gross debt purchased stood at Rs 304.20 Crore, while the gross equity sold stood at Rs 969.10 Crore and gross debt sold stood at Rs 652.90 Crore. Therefore, the net investment of equity and debt reported were Rs (283.40) Crore and Rs (348.80) Crore respectively.

On Tuesday, the Indian rupee closed at 49.72/73, 1.84% weaker than its previous close of 48.82/83. The rupee fell sharply as the domestic stock markets fell drastically for the second consecutive day.

On BSE, total number of shares traded were 21.44 Crore and total turnover stood at Rs 2,392.06 Crore. On NSE, total number of shares traded were 61.75 Crore and total turnover was Rs 8,019.41 Crore.

Top traded volumes on NSE Nifty – Unitech with 43932074 shares, Suzlon with 25222958 shares, DLF with 12442617 shares, ICICI Bank with total volume traded 11229079 shares followed by SAIL with 8263039 shares.

On NSE Future and Options, total number of contracts traded in index futures was 741013 with a total turnover of Rs 9,561.36 Crore. Along with this total number of contracts traded in stock futures were 874476 with a total turnover of Rs 9,066.44 Crore. Total numbers of contracts for index options were 1369939 with a total turnover of Rs. 19,356.97 Crore and total numbers of contracts for stock options were 87907 and notional turnover was Rs 971.46 Crore.

Today, Nifty would have a support at 2,685 and resistance at 2,752 and BSE Sensex has support at 8,819 and resistance at 8,945.