Pre Session Commentary - Feb 26 2009

Today domestic markets are likely to open positive as the government is expected to come up with its interim trade policy today, which may bring certain non-monetary aids to the export business. The contracting exports due to the recessionary waves across the developed nations have drastically hit the forex reserves of developing nations. Therefore as per RBI data, India’s current-account deficit widened to a record US$12.5bn during the last quarter, from US$9.8bn in the previous quarter. The roll over contracts and inflation data would also play a major role in moving the markets. Inflation is expected to further fall by another 50-60bps and Auto sector may witness fresh and remarkable positions in the open interest.

On Wednesday, the markets opened with phenomenal gains on the back of the stimulus package and the positive trend across other markets in Asia and Europe. After a flat trade in yesterday’s session, the investors today showed remarkable buying interest amidst the positive sentiments prevailing across the globe. The post mid-session however witnessed some profit booking pressures and therefore could not sustain its early gains. Auto sector gained the highest by 3% as car makers were benefited by the duty cuts, which they are likely to pass on to consumers to fillip the sales. Sectors like Auto, IT, TECK and Metal gained by 3%, 2.52%, 1.56% and 1.28% respectively. Realty and CG fell by 0.39% and 0.36% respectively. During the session we expect the markets to be trading positive with mild volatility.

The BSE Sensex closed high by 80.50 points at 8,902.56 and NSE Nifty ended high by 30.90 points at 2,764.80. The BSE Mid Caps and Small Caps ended with gains of 14.53 points and 18.58 points at 2,756.98 and 3,134.69 respectively. The BSE Sensex touched intraday high of 8,995.04 and intraday low of 8,879.72.

On Wednesday, the US stock markets closed in red. January existing homes sales report recorded a fall more than expected to their lowest level since 1997. Many of the sales were distressed, contributing to a near 15% year-over-year drop in the median home price. Inventory supply increased slightly to 9.6 months. On the other hand the investors also booked profits on the 4% rise on previous day’s trade. The Fed and Treasury released key details of its bank stress test plan. The Fed officials will assess the overall losses incurred by banks and accordingly the Fed will absorb such losses. US light crude oil for April delivery grew by USD2.54 to settle at USD42.50 a barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) declined by 80.05 points to close at 7,270.89. The NASDAQ Composite (RIXF) index fell by 16.40 points to close at 1,425.43 and the S&P 500 (SPX) fell by 8.24 points to close at 764.90.

Today major stock markets in Asia are trading mixed. Shanghai composite is down by 4.47 points to 2,202.12, Japan''s Nikkei is high by 99.09 points at 7,560.31. Hang Seng is low by 159.51 points at 12,845.57, South Korea''s Seoul Composite is up by 11.46 points at 1,078.54 and Singapore''s Strait Times is low by 9.14 points to 1,607.65.

Indian ADRs ended mostly lower. In technology sector, Infosys ended down by 0.65% along with Satyam by 3.41%. Further, Wipro ended with decrease of 1.15% while Patni Computers closed up by 1.62%. In banking sector HDFC Bank and ICICI Bank lost 5.21% and 3.97% respectively. In telecommunication sector, MTNL and Tata Communication advanced by 6.80% and 1.07% respectively. However, Sterlite Industries decreased by 2.29%.

The FIIs on Wednesday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 725.20 Crore and gross debt purchased stood at Rs. 521.30 Crore, while the gross equity sold stood at Rs 1,117.10 Crore and gross debt sold stood at Rs. 754.60 Crore. Therefore, the net investment of equity and debt reported were Rs (391.90) Crore and Rs (233.30) Crore respectively.

On Wednesday, the Indian rupee closed at 49.95/96, 02% weaker than its previous close of 49.87/88. The rupee slipped further for the third consecutive day as importers bought dollars to settle the month end bills.

On BSE, total number of shares traded were 18.85 Crore and total turnover stood at Rs 2,217.43 Crore. On NSE, total number of shares traded were 41.95 Crore and total turnover was Rs 6,626.73 Crore.

Top traded volumes on NSE Nifty – Unitech with 27206123 shares, DLF with 19310594 shares, Suzlon with 15783656 shares, ICICI Bank with total volume traded 10843876 shares followed by SAIL with 7963931 shares.

On NSE Future and Options, total number of contracts traded in index futures was 764310 with a total turnover of Rs 9,965.56 Crore. Along with this total number of contracts traded in stock futures were 1015733 with a total turnover of Rs 12,675.08 Crore. Total numbers of contracts for index options were 1201343 with a total turnover of Rs 16,728.16 Crore and total numbers of contracts for stock options were 57290 and notional turnover was Rs 761.06 Crore.

Today, Nifty would have a support at 2,783 and resistance at 2,814 and BSE Sensex has support at 8,952 and resistance at 9,112.