Pre Session Commentary - Feb 20 2009

Today domestic markets are likely to open positive as we expect a bounce back after a flat trade yesterday. The US markets and other Asian markets don’t show good signs of sentiments and therefore there could be some significance of bad cues on domestic market movements also. However on the other hand, we anticipate a good come back of rate sensitive sectors like banking, CG and Realty today, as amidst global recessionary pressures and its ripple effect across emerging nations, Reserve Bank of India governor D Subbarao said there''s "certainly room" to cut interest rates as the impact of the global recession was "much sharper" than expected. According to Subbarao, investments have declined as bank credit to companies and individuals shrank. The lackluster stock markets and the deteriorating IIP numbers are compelling Reserve Bank of India to reduce the key rates to levels where the economic activity sustains against the havoc of recession in other countries.

On Thursday, the markets opened with a shy positive numbers and continued to trade range bound. The volumes of trade were less and sentiments were weak as in the US markets yesterday. The Asian and other European markets also traded in a similar fashion as there was lack of news to move the markets in either direction. After the post mid session the markets witnessed mild volatility as the investors were apprehensive about the low inflation numbers. However towards the end the domestic markets managed to close in green. Sectors like IT, Tech, CD, Auto, Power and PSU closed with gains of 2.45%, 1.71%, 1.12%, 0.96%, 0.34% and 0.31% respectively. On the other hand sectors like CG, Realty, Bankex and Metal conceded 0.93%, 0.63%, 0.56% and 0.38% respectively. Mid caps and Small caps fell by 0.21% and 0.37% respectively. During the session we expect the markets to be trading positive with mild volatility.

The BSE Sensex closed high by 27.45 points at 9,042.63 and NSE Nifty ended with a marginal gain of 13.20 points at 2,789.35. The BSE Mid Caps and Small Caps ended with losses of 5.90 points and 11.96 points at 2,838.40 and 3,214.10 respectively. The BSE Sensex touched intraday high of 9,111.95 and intraday low of 8,977.66.

On Thursday, the US stock markets closed with losses. The investors reacted on pessimistically on the last set of quarterly results which were little discouraging. On the other hand, the Producer prices, which measure inflation, increased more than expected in January. The January PPI and core PPI were up 0.8% and 0.4%, respectively. The news that brought bearishness was the Initial jobless claims, which totaled at 627,000, topping the 620,000 claims that were expected. Initial claims were unchanged week-over-week, while the four-week moving average moved up to 619,000 from 608,500. The continuing jobless claims reached record highs of 4.99 million. Economists forecast 4.81 million continuing claims. The four-week moving average for continuing claims stands at 4.84 million, up from 4.75 million. US light crude oil for March delivery grew by $4.86 to settle at $39.48 a barrel on the New York Mercantile Exchange. The March contract will going to expire on Friday. The crude prices surged after the government said that crude supplies fell last week for the first time in two months.

The Dow Jones Industrial Average (DJIA) fell by 89.68 points to close at 7,465.95 The NASDAQ Composite (RIXF) index fell by 25.15 points to close at 1,442.82 and the S&P 500 (SPX) lost 9.48 points to close at 778.94.

Today major stock markets in Asia are trading mixed. Shanghai composite is up by 13.03 points to 2,240.15, Japan''s Nikkei is low by 116.96 points at 7,440.69. Hang Seng lost 265.61 points at 12,757.75, South Korea''s Seoul Composite is low by 33.60 points at 1,073.50 and Singapore''s Strait Times is lower by 22 points to 1,607.35.

Indian ADRs ended mixed. In technology sector, Satyam ended lower by 7.10% along with Infosys by 1.71%. Further, Wipro ended with increase of 1.12% and Patni Computers closed up by 1.41%. In banking sector HDFC Bank and ICICI Bank lost 0.26% and 1.36% respectively. In telecommunication sector, MTNL and Tata Communication advanced by 1.89% and 0.96% respectively. However, Sterlite Industries remained unchanged..

The FIIs on Thursday stood as net sellers in equity and net buyers in debt. Gross equity purchased stood at Rs 958.90 Crore and gross debt purchased stood at Rs. 822.50 Crore, while the gross equity sold stood at Rs. 1,392.60 Crore and gross debt sold stood at Rs. 653.90 Crore. Therefore, the net investment of equity and debt reported were Rs (433.70) Crore and Rs 168.60 Crore respectively.

On Thursday, the Indian rupee closed at 49.61/63, 0.62% stronger than its previous close of 49.92/93. The rupee gained strengths as the stocks markets showed some gain. During the last three days the rupee has lost 125 paise (2.57%) and as per the forex dealers the rupee fell drastically due to heavy buying of dollars by foreign banks to sell in the offshore markets non-deliverable forward markets to make profits.

On BSE, total number of shares traded were 21.51 Crore and total turnover stood at Rs 2,428.97 Crore. On NSE, total number of shares traded were 45.42 Crore and total turnover was Rs 6,739.07 Crore.

Top traded volumes on NSE Nifty – Unitech with 29398778 shares, Suzlon with 20946417 shares, DLF with 15095147 shares, ICICI Bank with total volume traded 11655190 shares followed by SAIL with 10880071 shares.

On NSE Future and Options, total number of contracts traded in index futures was 621793 with a total turnover of Rs 8,030.58 Crore. Along with this total number of contracts traded in stock futures were 871997 with a total turnover of Rs 9715.33 Crore. Total numbers of contracts for index options were 867934 with a total turnover of Rs 12,165.03 Crore and total numbers of contracts for stock options were 63248 and notional turnover was Rs 726.74 Crore.

Today, Nifty would have a support at 2,756 and resistance at 2,838 and BSE Sensex has support at 8,986 and resistance at 9,165.