Pre Session Commentary - March 3 2009

Today domestic markets are likely to open negative as majority of Asian markets have once again opened in deep red. The sentiments are very fragile across the global markets as the financial sectors are under huge trouble due to the recession. The AIG reporting a massive loss of $ 61.7 billion for the third quarter shows signs of further deterioration in the financial sector. This has deepened worries of economic slowdown which as per Warren Buffet is likely to stretch beyond 2009. There is no specific domestic news to propel or support the falling domestic markets. Investors would be very cautious on their holdings and positions. One could witness further slide on the bench mark indices as there would be huge selling pressure across the broader level to evade the risk of uncertainty.

On Monday, the markets witnessed a brutal loss amidst weak global cues. The worst that expected contraction estimates of the US GDP data shook the whole world. Asian markets opened with huge losses and domestic markets were never late to open with a negative gap. In the Asian markets expect Shanghai composite, the rest closed in red territory. The European markets also traded in the southward direction since the negative gap opening. The sentiments were very fragile as there was not domestic news to support or resurrect the downfall. Reliance Infra was the biggest loser for the day as the company is set to merge with RIL for a swap ratio of 16:1. On the other hand, sectors like Bankex, Metal, Oil & Gas and CG were hammered brutally as they lost 4.86%, 4.31%, 2.94% and 2.90% respectively. Consumer Durable was the only sector to escape the blow. During the session we expect the markets to be trading negative with mild volatility.

The BSE Sensex closed low by 284.53 points at 8,607.08 and NSE Nifty ended low by 89.05 points at 2,674.60. The BSE Small cap and Mid Cap closed with losses of 57.31 points and 56.73 points at 2,700.98 and 3,049.28. The BSE Sensex touched intraday high of 8,762.88 and intraday low of 8,563.52.

On Monday, the US stock markets closed in red for the fourth consecutive session. The sentiments were weak since the opening bell as the AIG reported the loss of $61.7 billion, highest loss by any company for a quarter ever. The company will receive $ 30 billion as a bail out from US government. On the other hand the personal income for January was up 0.4% after declining 0.2% the prior month. Economists had estimated 0.2% decline in January. Warren Buffet has reinforced the fact that the economy is in shambles, which is likely to remain beyond 2009. 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 299.64 points to close at 6,763.29. The NASDAQ Composite (RIXF) index fell by 54.99 points to close at 1,322.85 and the S&P 500 (SPX) fell by 34.27 points to close at 700.82.

Today major stock markets in Asia are trading in deep red. Shanghai composite is down by 26.39 points to 2,067.06, Japan''s Nikkei is low by 30.09 points at 7,250.06. Hang Seng is low by 248.09 points at 12,069.37, South Korea''s Seoul Composite is up by 4.41 points at 1,023.22 and Singapore''s Strait Times is also trading low by 0.08 points to 1,533.32.

Indian ADRs closed down. In technology sector, Wipro ended down by 9.67% along with Infosys by 5.87%. Further, Satyam gained 6.62% while Patni Computers closed down by 4.84%. In banking sector ICICI Bank and HDFC Bank lost 11.72% and 7.10% respectively. In telecommunication sector, MTNL lost 10% and Tata Communication plunged 7.31%. Sterlite Industries decreased by 7.17%.

The FIIs on Monday stood as net sellers in equity and net buyer in debt. Gross equity purchased stood at Rs 1,840.90 Crore and gross debt purchased stood at Rs 91.40 Crore, while the gross equity sold stood at Rs 2,111.20 Crore and gross debt sold stood at Rs. 58.30 Crore. Therefore, the net investment of equity and debt reported were Rs (270.30) Crore and Rs 33.10 Crore respectively.

On Monday, the Indian rupee closed at 51.90/92, 1.5% weaker than its previous close of 51.10/12. The rupee slipped further for the sixth consecutive day as the foreign investors are pulling their money out of Indian stock markets. The exports are also plummeting causing further concerns of dollar flow.

On BSE, total number of shares traded were 22.59 Crore and total turnover stood at Rs 2,587.98 Crore. On NSE, total number of shares traded were 46.20 Crore and total turnover was Rs 7,133.54 Crore.

Top traded volumes on NSE Nifty – Unitech with 26101692 shares, Power Grid with Reliance Petro with 25226551 shares, ICICI Bank with 12044522 shares, Suzlon Energy with total volume traded 11197699 shares followed by SAIL with 9275245 shares.

On NSE Future and Options, total number of contracts traded in index futures was 745063 with a total turnover of Rs 9,461.37 Crore. Along with this total number of contracts traded in stock futures were 329134 with a total turnover of Rs 8,982.04 Crore. Total numbers of contracts for index options were 1129081 with a total turnover of Rs 15,464.73 Crore and total numbers of contracts for stock options were 46615 and notional turnover was Rs 1,402.54 Crore.

Today, Nifty would have a support at 2,594 and resistance at 2,623 and BSE Sensex has support at 8,409 and resistance at 8,492.