Pre Session Commentary - Feb 6 2009

Today domestic markets are likely to open positive. The US markets had closed in green and all the Asian markets have opened with phenomenal gains. The sentiments across Asian would propel the domestic markets as well, however one cannot deny the low volume trade in the previous four sessions, which may creep in today’s trade also. Volatility is likely to creep in as there is no specific news to guide the market towards north or south. In Europe the Bank of England has reduced its lending rate to 1% from 1.50% and therefore many European markets were brutally shattered as the baking and financial stocks plummeted. The opening of the European markets may have certain implications on the domestic sentiments after the post mid session.

On Thursday, the markets opened with a positive gap but soon dived into deep red. Due to lack of any specific macro economic news the markets today marched southwards. The sentiments were not good in the other Asian markets as well as European markets which traded in deep red. The diminution in inflation numbers by 57bps to 5.07% for the week ended January 24 2008 had very little significance for the investors’ sentiments. Sectors like Auto, CD, IT and CG witnessed intense selling pressures as they lost 1.98%, 1.88%, 1.86 and 1.47% respectively. Mid caps and Small caps also lost 0.65% and 0.85% respectively. During the session we expect the markets to be trading positive. The Indian government is going to announce the interim budget in the mid of this month in which it will consider all options the tax cuts to give a boost to the economy.





The BSE Sensex closed low by 110.97 points at 9,090.88 and NSE Nifty ended with losses of 23 points at 2,780.05. The BSE Mid Caps and Small Caps ended with losses of 18.46 points and 27.79 points at 2,842.10 and 3,245.30 respectively. The BSE Sensex touched intraday high of 9,247.09 and intraday low of 9,017.08.

The US markets on Friday closed in green. The markets rallied after the bounce back on financial stocks was witnessed as investors conceived the idea that the government’s forthcoming plan to shore up banks may bring some charm for the banking and financial stocks. CISCO, Visa and Mastercard announced better than expected results. On the negative side, weekly initial jobless claims were up for the fourth straight week, this time climbing 35,000 to 626,000 for the week ending Jan. 31. The number exceeded the 580,000 claims that were expected, and was the highest level since 1982.

The Dow Jones Industrial Average (DJIA) closed up by 106.41 points at 8,063.07 NASDAQ index gained 31.19 points at 1,546.24 and the S&P 500 (SPX) gained 13.62 points at 832.23.

Indian ADRs ended mixed. In technology sector, Infosys ended down by 1.03% along with Satyam by 5.73%. Further, Wipro remained unchanged while Patni Computers closed up by 0.71%. In banking sector ICICI Bank and HDFC Bank gained 0.99% and 2.79% respectively. In telecommunication sector, Tata Communication advanced by 1.81% while MTNL dropped by 1.39%. Sterlite Industries decreased by 10.37%.

Today major stock markets in Asia have opened positive. Shanghai composite is up by 40.92 points to 2,139.94, Japan''s Nikkei is also up by 153.31 points at 8,102.96. Hang Seng surged 251.74 points at 13,430.64. South Korea''s Seoul Composite is up by 23.48 points at 1,201.36 and Singapore''s Strait Times is also up by 4.27 points to 1,708.87.

The FIIs on Thursday stood as net sellers in equity and net buyers in debt. Gross equity purchased stood at Rs 1,267.00 Crore and gross debt purchased stood at Rs 92.60 Crore, while the gross equity sold stood at Rs 1,291.40 Crore and gross debt sold stood at Rs 10.30 Crore. Therefore, the net investment of equity and debt reported were Rs (24.40) Crore and Rs 82.40 Crore respectively.

On Thursday, the Indian rupee ended at 48.77/78 per dollar, 0.1% stronger Wednesday’s close of 48.82/83. The rupee was supported by dollar sales by exporters, but greenback demand from oil companies and losses in the domestic share market prevented stronger gains.

On BSE, total number of shares traded were 33.90 Crore and total turnover stood at Rs 2,589.37 Crore. On NSE, total number of shares traded were 69.58 Crore and total turnover was Rs 69.25 Crore.

Top traded volumes on NSE Nifty – Unitech with 33714593 shares, Suzlon Energy with 16801352 shares, DLF with 15572676 shares, SAIL with total volume traded 13707382 shares followed by Tata Steel with 8187008 shares.

On NSE Future and Options, total number of contracts traded in index futures was 741214 with a total turnover of Rs 9482.50 Crore. Along with this total number of contracts traded in stock futures were 750126 with a total turnover of Rs 7,154.03 Crore. Total numbers of contracts for index options were 939598 with a total turnover of Rs 13,499.69 Crore and total numbers of contracts for stock options were 67196 and notional turnover was Rs 672.11 Crore.

Today, Nifty would have a support at 2,768 and resistance at 2,846 and BSE Sensex has support at 9,050 and resistance at 9,268.