Pre Session Commentary - Feb 2 2009

Today domestic markets are likely to open negative as the sentiments prevailing in the other markets of Asia are bearish. The US markets also closed in the red on the back of contraction in GDP numbers and weak consumer spending. There is no specific news that would shield the domestic markets from the influence of other foreign markets. As the domestic markets had gained some momentum on Friday’s trade, today we anticipate some profit booking and a volatile trading session.

On Friday, the markets ended in green after a negative gap opening. Heavy buying in the frontline stocks helped the broader markets to stay alive till the end. The markets exuded surprising trend after a negative opening. Majority of sectors except the HC sector recovered the early losses and managed to close in green. Sectors like Realty, Metal, Oil & Gas and FMCG closed with phenomenal gains of 4.32%, 4.05%, 3.58% and 2.04% respectively. Mid caps and Small caps also gained by 1.31% and 1.08% respectively. During the session we expect the markets to be trading volatile.

The BSE Sensex closed high by 187.96 points at 9,424.24 and NSE Nifty ended with a gain of 50.85 points at 2,823.95 The BSE Mid Caps and Small Caps ended with gains of 38.03 points and 35.64 points at 2,941.47 and 3,339.05 respectively. The BSE Sensex touched intraday high of 9,438.31 and intraday low of 9,087.36.

The US markets on Friday closed in red. The session started with a gain on the back of better than expected GDP report. Later the investors were caught by the fear of contraction in GDP. U.S. economy contracted at an annualized rate of 3.8% during the fourth quarter, marking the steepest drop in economic activity since 1982. The decline was less severe than the 5.5% drop that was expected, but that was largely due to an unexpected increase in inventories. Consumer spending, which accounts for roughly 70% of economic activity, remains weak as consumption expenditures dropped at a 3.5% annual rate. Crude oil futures for the month of Mach delivery grew by $0.42 to $41.86 per barrel on New York Mercantile Exchange. Earlier the crude futures rose more than 4% to USD 43.44.

The Dow Jones Industrial Average (DJIA) closed lower by 148.15 points at 8,000.86 NASDAQ index lost 31.42 points at 1,476.42 and the S&P 500 (SPX) tumbled 19.26 points at 825.88.

Indian ADRs ended mixed. In technology sector, Satyam ended up by 0.53% along with Patni Computers by 1.28%. However, Infosys ended with decrease of 3.28% and Wipro closed lower by 0.86%. In banking sector ICICI Bank gained 0.73% while HDFC Bank dropped by 1.92%. In telecommunication sector, MTNL advanced by 0.34% while Tata Communication slipped 0.99%. Sterlite Industries increased by 2.88%.

Today major stock markets in Asia have opened negative. Shanghai composite is up by 10.20 points to 2,000.86. Japan''s Nikkei slipped 85.09 points at 7,908.96 along with Hong Kong''s Hang Seng that plunged 280.44 points at 12,997.77. South Korea''s Seoul Composite is down by 2.06 points at 1,160.05 and Singapore''s Strait Times dropped by 37.93 at 1,728.79.

The FIIs on Friday stood as net buyers in equity and net sellers in debt. Gross equity purchased stood at Rs 2,097.20 Crore and gross debt purchased stood at Rs 69.30 Crore, while the gross equity sold stood at Rs 1,822.10 Crore and gross debt sold stood at Rs 76.50 Crore. Therefore, the net investment of equity and debt reported were Rs 275.10 Crore and Rs (7.30) Crore respectively.

On Friday, the Indian rupee ended at 48.87/88 per dollar, 02% stronger than previous close of 48.97/98. The rupee rose on Friday as foreign banks unwound long dollar positions and domestic share market reported smart gains.

On BSE, total number of shares traded were 31.60 Crore and total turnover stood at Rs 3,606.30 Crore. On NSE, total number of shares traded were 7297.26 Crore and total turnover was Rs 9,835.98 Crore.

Top traded volumes on NSE Nifty – Unitech with 73505933 shares, Suzlon Energy with 43843350 shares, Reliance Comm with 16838256 shares, DLF with total volume traded 15466199 shares followed by SAIL with 13357229 shares.

On NSE Future and Options, total number of contracts traded in index futures was 786286 with a total turnover of Rs 10,344.13 Crore. Along with this total number of contracts traded in stock futures were 1019105 with a total turnover of Rs 9,427.72 Crore. Total numbers of contracts for index options were 9,15,801 with a total turnover of Rs 13,367.98 Crore and total numbers of contracts for stock options were 106853 and notional turnover was Rs 1,103.11 Crore.

Today, Nifty would have a support at 2,762 and resistance at 2,918 and BSE Sensex has support at 9,198 and resistance at 9,545.