Pre Session Commentary - March 2 2009

Today domestic markets are likely to open negative as other markets across Asia have opened with brutal losses. The only domestic news that would storm the markets today is the merger of RIL and RPL. The swap ratio is not yet confirmed however there are anticipations that RIL’s stock may surge due to certain advantages of merger. Sterlite Industries could be another stock in motion today as the company has bid US Asarco for $ 1.5 billion. However the domestic market sentiments are likely to track the movements and sentiments of other Asian markets. One could witness selling pressure amidst volatility during the day’s trading session.

On Friday, the markets managed to pare off it early losses but still closed in red. The sentiments were weak since the opening and there was enough selling pressure across broader markets. Majority of Asian markets were trading in red and all the European markets could hardly survive the claw of bears. Amidst bearish sentiments prevailing across other markets, domestic traders were never late to evade their risk. However at the fag end of trading session, fresh buying helped recover some early losses. Sectors like Bankex, FMCG and Metal managed to close in green by gains of 1.31%, 0.34% and 0.22% respectively. However Realty, Oil & Gas and Tech were the top laggards as they fell by 2.29%, 1.64% and 1.40% respectively. During the session we expect the markets to be trading negative with volatility across the trading session.

The BSE Sensex closed low by 63.25 points at 8,891.61 and NSE Nifty ended low by 22 points at 2,763.65. The BSE Mid Caps closed flat at 2,758.29 and 3,106.01. The BSE Sensex touched intraday high of 8,944.11 and intraday low of 8,728.66.

On Friday, the US stock markets closed in red due to expectations of contraction in its GDP for the fourth quarter. Economic data remains gloomy. The fourth quarter GDP has been revised lower to reflect an annual rate of -6.2% versus a previously estimated -3.8%. The decrease in fourth quarter activity primarily reflected negative contributions from exports, personal consumption expenditures, equipment and software, and residential fixed investment. The selling pressure exacerbated after Citi Group announced that it is offering common shares of $ 27.5 billion in its existing preferred equity. The government will exchange a maximum of $25 billion face value of its preferred stock, which gives the government a 36% stake in the company. US light crude oil for April delivery reversed its three day rally, as the prices fell by $0.46 to settle at $44.76 a barrel on the New York Mercantile Exchange. The crude prices touched a low of $42.55 during the intraday.

The Dow Jones Industrial Average (DJIA) declined by 119.15 points to close at 7,062.93. The NASDAQ Composite (RIXF) index fell by 13.63 points to close at 1,377.84 and the S&P 500 (SPX) fell by 17.74 points to close at 735.09.

Today major stock markets in Asia are trading in deep red. Shanghai composite is down by 7.75 points to 2,075.08, Japan''s Nikkei is low by 242.46 points at 7,325.96. Hang Seng is low by 504.94 points at 12,306.63, South Korea''s Seoul Composite is low by 46.07 points at 1,016.96 and Singapore''s Strait Times is also trading low by 53.94 points to 1,540.93.

Indian ADRs closed lower. In technology sector, Satyam ended down by 19.25% along with Wipro by 4.05%. Further, Infosys remained unchanged and Patni Computers closed down by 5.80%. In banking sector ICICI Bank and HDFC Bank lost 2.88% and 1.49% respectively. In telecommunication sector, MTNL gained 8.11% while Tata Communication plunged 0.81%. However, Sterlite Industries increased by 3.16%.

The FIIs on Friday stood as net sellers in equity and net buyer in debt. Gross equity purchased stood at Rs 1,353.60 Crore and gross debt purchased stood at Rs 755.50 Crore, while the gross equity sold stood at Rs 1,592.30 Crore and gross debt sold stood at Rs. 306.60 Crore. Therefore, the net investment of equity and debt reported were Rs (238.60) Crore and Rs 448.90 Crore respectively.

On Friday, the Indian rupee closed at 51.10/12, 1.3% weaker than its previous close of 50.45/47. The rupee slipped further for the fifth consecutive day on the back of huge demand from importers and plummeting stock markets.

On BSE, total number of shares traded were 22.69 Crore and total turnover stood at Rs 3,052.95 Crore. On NSE, total number of shares traded were 53.24 Crore and total turnover was Rs 8,898.93 Crore.

Top traded volumes on NSE Nifty – Unitech with 23204854 shares, Power Grid with 19916378 shares, ICICI Bank with 17868678 shares, Tata Steel with total volume traded 14548491 shares followed by SAIL with 13640735 shares.

On NSE Future and Options, total number of contracts traded in index futures was 955328 with a total turnover of Rs 12,316.70 Crore. Along with this total number of contracts traded in stock futures were 378407 with a total turnover of Rs 10,302.97 Crore. Total numbers of contracts for index options were 1131309 with a total turnover of Rs 15,693.34 Crore and total numbers of contracts for stock options were 28719 and notional turnover was Rs 891.46 Crore.

Today, Nifty would have a support at 2,693 and resistance at 2,742 and BSE Sensex has support at 8,773 and resistance at 8,862.