Pre Session Commentary - Feb 27 2009

Today domestic markets are likely to open positive as major Asian markets like Nikkei and Hang Seng are trading positive. The United Kingdom has planned to protect assets of European banks that helped European markets gain momentum on yesterday’s trade. The interim trade policy announced yesterday has provided certain relief to garments and jewllery industry. The government further aims to achieve a export target of $200 billion. On the other hand the declining inflation numbers which recorded at 3.36% gives ample space for RBI to reduce its key rates. Investors could anticipate major cut in the key rates that could support the demand levels.

On Thursday, the markets opened shy and dived southwards. Across broader markets the selling pressure was witnessed due to lack good economic news. Ranbaxy was the biggest loser of the day as the stock plummeted 18% to Rs 169.95 on BSE. The stock was under pressure due to the news that US FDA has falsified data and test results in its drug applications. However, during the later trading session the markets recovered to close in green on the back of short covering positions, US Futures trading up and European markets moving southwards. Inflation fell at 3.36% as against 3.92% in the previous week. Sectors like Auto, Oil & Gas and IT gained by 2.74%, 1.28% and 1.14% respectively. However Bankex, CD and Realty fell by 2.15%, 1.33% and 0.07% respectively. During the session we expect the markets to be trading positive with volatility creeping in the early trading session.

The BSE Sensex closed high by 52.30 points at 8,954.86 and NSE Nifty ended high by 23.15 points at 2,785.65. The BSE Mid Caps closed flat at 2,759.46 whereas Small Caps ended low by 21.92 points at 3,112.77. The BSE Sensex touched intraday high of 8,998.31 and intraday low of 8,788.32.

On Thursday, the US stock markets closed in red due to weak macro economic data. The consumer durable goods orders fell more than expected 5.2%. Further January new home sales fell more than expected to an annualized rate of 3,09,000 units. Jobless claims continue to rise beyond expectations. Initial claims climbed 36,000 to 667,000 from the prior week. Continuing claims came in just below 5.03 million, up from nearly 5.00 million in the prior reading. Besides, FDIC reported that at the end of the fourth quarter its list of troubled institutions grew to 252 from 171 at the end of the third quarter. US light crude oil for April delivery grew by USD2.72 to settle at USD45.22 a barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) declined by 88.81 points to close at 7,182.08. The NASDAQ Composite (RIXF) index fell by 33.96 points to close at 1,391.47 and the S&P 500 (SPX) fell by 12.07 points to close at 752.83.

Today major stock markets in Asia are trading mixed. Shanghai composite is down by 40.65 points to 2,080.60, Japan''s Nikkei is high by 61.59 points at 7,519.52. Hang Seng is up by 31.45 points at 12,926.39, South Korea''s Seoul Composite is up by 12.92 points at 1,067.71 and Singapore''s Strait Times is low by 10.63 points to 1,606.81.

Indian ADRs closed lower. In technology sector, Infosys ended down by 1.71% along with Satyam by 5.29%. Further, Wipro ended with decrease of 1.82% and Patni Computers closed down by 3.59%. In banking sector ICICI Bank and HDFC Bank lost 5.17% and 1.93% respectively. In telecommunication sector, MTNL and Tata Communication plunged 3% and 0.19% respectively. However, Sterlite Industries increased by 1.06%.

The FIIs on Thursday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 811.30 Crore and gross debt purchased stood at Rs. 276.40 Crore, while the gross equity sold stood at Rs 1,264.50 Crore and gross debt sold stood at Rs. 934.50 Crore. Therefore, the net investment of equity and debt reported were Rs (453.20) Crore and Rs (658.10) Crore respectively.

On Thursday, the Indian rupee closed at 50.45/47, 1% weaker than its previous close of 49.95/96. The rupee slipped further for the fourth consecutive day as importers bought dollars to settle the month end bills.

On BSE, total number of shares traded were 20.30 Crore and total turnover stood at Rs 2,696.32 Crore. On NSE, total number of shares traded were 58.50 Crore and total turnover was Rs 9,617.26 Crore.

Top traded volumes on NSE Nifty – Unitech with 35467404 shares, Suzlon Energy with 22088885 shares, DLF with 21105345 shares, ICICI Bank with total volume traded 17237136 shares followed by Ranbaxy Labs with 9495158 shares.

On NSE Future and Options, total number of contracts traded in index futures was 1011550 with a total turnover of Rs 13,217.59 Crore. Along with this total number of contracts traded in stock futures were 1177288 with a total turnover of Rs 16,725.23 Crore. Total numbers of contracts for index options were 1371910 with a total turnover of Rs 19,016.57 Crore and total numbers of contracts for stock options were 72281 and notional turnover was Rs 1,182.92 Crore.

Today, Nifty would have a support at 2,742 and resistance at 2,835 and BSE Sensex has support at 8,886 and resistance at 9,179.