Pre Session Commentary - Feb 24 2009

Today domestic markets are likely to open with a negative gap as the US markets fell drastically on Friday and the other Asian markets have also opened with huge losses. The sentiments are very fragile across the globe as the macro economic outlook of the world is showing signs of further deterioration. The domestic investors are likely to follow the global cues and therefore today one could anticipate risk aversion. Huge selling pressure could claw down the markets to low levels.

On Friday, the markets opened with huge negative gap after a shattering US and other Asian markets. The US initial jobless claims totaled at 6.20 lakh higher than the expected 6.27 lakh claims brought more worries in the US markets which devastated the sentiments across the world. Asian markets opened with blood bath and the domestic markets were never late to follow the bearish trend. The front line stocks were brutally shattered and heavyweights like ICICI bank, Rcom, Reliance Infra and TCS were the top losers in the sensex as they lost 7.07%, 4.55%, 3.38% and 3.23% respectively. The top laggards in the sectoral indices were Bankex, IT, Metal, Teck and Oil & Gas that fell by 3.49%, 2.69%, 2.67%, 2.21% and 2.17% respectively. During the session we expect the markets to be trading in deep red.

The BSE Sensex closed low by 199.42 points at 8,843.21 and NSE Nifty ended with a fall of 52.90 points at 2,736.45. The BSE Mid Caps and Small Caps ended with losses of 46.68 points and 53.51 points at 2,791.72 and 3,160.59 respectively. The BSE Sensex touched intraday high of 8,943.78 and intraday low of 8,762.58.

On Friday, the US stock markets closed in red. There was no specific economic news on the markets and investors were little skeptic about the semiannual monetary policy to be announced by Ben Bernanke on Monday. The government is likely to infuse more money into the Citi Group to further increase its’ stake and there are also apprehensions about Vikram Pandit to loose his job as the CEO of the Citi Group. The government had also announced their support to the financial system with temporary capital infuse. The financial stocks had gained 4.6% but sooner than later it plunged with a loss of 3% as investors recognized that the government support would only improve the capital ratios and not solve the troubles. US light crude oil for April delivery fell by $1.59 to settle at $38.44 a barrel on the New York Mercantile Exchange. There are deep demand worries that are pulling the prices of crude oil down.

The Dow Jones Industrial Average (DJIA) fell by 250.89 points to close at 7,114.78. The NASDAQ Composite (RIXF) index fell by 53.51 points to close at 1,387.72 and the S&P 500 (SPX) lost 26.72 points to close at 743.33.

Today major stock markets in Asia are trading with huge losses. Japan''s Nikkei is low by 191.66 points at 7,184.50. Hang Seng is down by 512.18 points at 12,662.92, South Korea''s Seoul Composite is low by 40.12 points at 1,059.29 and Singapore''s Strait Times is low by 39.40 points to 1,591.29.

Indian ADRs ended lower. In technology sector, Infosys ended down by 1.99% while Satyam remained unchanged. Further, Wipro ended with decrease of 2.92% while Patni Computers closed up by 1.22%. In banking sector HDFC Bank and ICICI Bank lost 4.31% and 2.90% respectively. In telecommunication sector, Tata Communication dropped by 3.15% and MTNL remained unchanged. However, Sterlite Industries decreased by 3.64%.

The FIIs on Friday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 941.30 Crore and gross debt purchased stood at Rs. 435.40 Crore, while the gross equity sold stood at Rs. 1,261.40 Crore and gross debt sold stood at Rs. 513.10 Crore. Therefore, the net investment of equity and debt reported were Rs (320.20) Crore and Rs (77.70) Crore respectively.

On Friday, the Indian rupee closed at 49.72/74, 0.2% weaker than its previous close of 49.61/63. The rupee fell as the stock markets crashed badly due to weak global cues and therefore the worries of foreign capital outflow and low inflow made the dollar costlier.

On BSE, total number of shares traded were 20.73 Crore and total turnover stood at Rs 2,615.54 Crore. On NSE, total number of shares traded were 42.65 Crore and total turnover was Rs 6,459.71 Crore.

Top traded volumes on NSE Nifty – Unitech with 25148296 shares, DLF with 13971050 shares, ICICI Bank with 12628960 shares, Suzlon with total volume traded 10910517 shares followed by SAIL with 7777259 shares.

On NSE Future and Options, total number of contracts traded in index futures was 993145 with a total turnover of Rs 12,693.45 Crore. Along with this total number of contracts traded in stock futures were 890639 with a total turnover of Rs 9,987.29 Crore. Total numbers of contracts for index options were 1421380 with a total turnover of Rs 19,676.03 Crore and total numbers of contracts for stock options were 71603 and notional turnover was Rs 792.88 Crore.

Today, Nifty would have a support at 2,662 and resistance at 2,702 and BSE Sensex has support at 8,661 and resistance at 8,769.