Pre Session Commentary - March 12 2009

Today domestic markets are likely to open negative as the other Asian markets have opened with blood bath. RBI governor Dr. Subba Rao has stated to a Japanese news paper that achieving a GDP growth rate of 7% is little impossible. The IIP growth data for January would come today and the numbers would also have some impact on the market movements. There are anticipations that the January IIP numbers would show little positive growth as against a contraction of 2% in December. The sentiments across other markets are very weak and therefore domestic investors may also trade with a pessimistic and cautious note.

On Monday, the domestic markets opened with a negative gap and closed in red. The sentiments were weak since the opening as anticipated due to weak global cues. There was no sign of recovery throughout the day’s trade. Further towards the end the selling pressure intensified and the frontline stocks were brutally shattered. Profit booking was witnessed across the broader level on the surge of Friday’s trade. Sectors like Realty, FMCG, Bankex and Teck lost 3.21%, 2.78%, 2.78% and 2.58% respectively. Whereas Auto was the only sectors that remained safe with a marginal gain of 0.07%. During the session we expect the markets to be trading volatile.

The BSE Sensex closed low by 165.42 points at 8,160.40 and NSE Nifty fell by 47 points at 2,573.15. The BSE Small cap and Mid Cap closed with losses of 32.81 points and 45.05 points at 2,553.49 and 2,866.68 respectively. The BSE Sensex touched intraday high of 8,259.22 and intraday low of 8,110.10.

On Wednesday, the US stock markets closed flat. The phenomenal rally in the early trade was later discounted with huge profit booking. The session therefore witnessed a choppy trade after investors booked profits across broader stocks. However investors are also waiting for tomorrow''s congressional committee meeting, which will examine mark-to-market accounting rules. The rules have enabled massive write-downs at banks and other financial companies. The temporarily suspension of the rules could remove an overhang from many financial companies, potentially allowing their shares to rip higher. There was no specific news to drive the markets as such the markets closed nearly flat. US light crude oil for April delivery fell by a drastic $3.38 to settle at $42.33 a barrel on the New York Mercantile Exchange. The crude oil fell as the US Energy Information Administration said that the domestic crude oil inventories rose more than 7,00,000 barrels to 351.3 million barrels in the week ended March 6. They have further forecasted a fall in the demand of oil during 2009.

The Dow Jones Industrial Average (DJIA) inclined by 3.91 points to close at 6,930.40 The NASDAQ Composite (RIXF) index grew by 13.36 points to close at 1,371.64 and the S&P 500 (SPX) grew by 1.76 points to close at 721.36.

Today major stock markets in Asia are trading negative. Shanghai composite is low by 39.64 points to 2,099.83 along with Hang Seng that is trading lower by 6.15 points at 11,924.51 and South Korea''s Seoul Composite is low by 7.53 points at 1,119.98. Japan''s Nikkei is also low by 79.02 points at 7,297.10 and Singapore''s Straits Times is low by 21.79 points at 1,483.72.

Indian ADRs ended mostly lower. In technology sector, Satyam ended down by 1.10% along with Infosys by 0.04%. Further, Patni Computers lost 1.42% and Wipro closed down by 3.18%. In banking sector ICICI Bank and HDFC Bank lost 2.68% and 1.61% respectively. In telecommunication sector, MTNL advanced by 1.24% and Tata Communication gained 1.92%. However, Sterlite Industries dropped by 0.20%.

The FIIs on Monday stood as net sellers in equity and net buyers in debt. Gross equity purchased stood at Rs 1,818.70 Crore and gross debt purchased stood at Rs 294.40 Crore, while the gross equity sold stood at Rs 1,816.20 Crore and gross debt sold stood at Rs. 250.60 Crore. Therefore, the net investment of equity and debt reported were Rs (1.50) Crore and Rs 43.80 Crore respectively.

On Monday, the Indian rupee closed at 51.85/87, 0.38% stronger than its previous close of 51.63/65. The fall of stock markets pulled the rupee low on apprehensions of dollar inflow.

On BSE, total number of shares traded were 22.79 Crore and total turnover stood at Rs 2,201.43 Crore. On NSE, total number of shares traded were 48.75 Crore and total turnover was Rs 6,524.68 Crore.

Top traded volumes on NSE Nifty – Unitech with22651685, ICICI Bank with 19459652 shares, Suzlon Energy with 12342100 shares, Reliance Petro with 9127309 shares followed by HUL with 8065466 shares.

On NSE Future and Options, total number of contracts traded in index futures was 799468 with a total turnover of Rs 9,771.16 Crore. Along with this total number of contracts traded in stock futures were 341837 with a total turnover of Rs 8,180.96 Crore. Total numbers of contracts for index options were 1454658 with a total turnover of Rs 19,007.44 Crore and total numbers of contracts for stock options were 34494 and notional turnover was Rs 937.69 Crore.

Today, Nifty would have a support at 2,523 and resistance at 2,598 and BSE Sensex has support at 8,020 and resistance at 8,255.