Pre Session Commentary - March 4 2009

Today domestic markets are likely to open positive as a bounce back is likely to happen due to value buying in frontline stocks. After a brutal loss at the later trading session yesterday, we expect some fresh buying today on the heavy weight stocks as many of these have reached their 52 week lows. On the other hand the Asian markets have also opened positive showing signs of recovery. The US markets on the other hand closed with marginal losses which at this juncture is laudable. Amidst fresh buying we expect the markets to be trading positive with an essence of volatility. The sentiments would depend a lot on the movements of other markets around the world.

On Tuesday, the markets opened shy but later tumbled hugely in the southward direction. The fresh buying helped domestic markets gain some momentum in the early trade. The global cues were very discouraging, however investors showed some buoyancy buying in the frontline stocks. European markets also showed some sign of buying amidst mixed trade. However during the later trading session profit booking and fresh selling dragged the markets to low levels. Sectors like CD, FMCG, Tech, Bankex and Oil & Gas suffered huge blow as they lost 3.15%, 2.59%, 2.15% and 2.10% respectively. During the session we expect the markets to be trading positive with an essence of volatility.

The BSE Sensex closed low by 179.79 points at 8,427.29 and NSE Nifty ended low by 52.20 points at 2,622.40. The BSE Small cap and Mid Cap closed with losses of 43.85 points and 39.72 points at 2,657.13 and 3,009.56. The BSE Sensex touched intraday high of 8,635.20 and intraday low of 8,390.21.

On Tuesday, the US stock markets closed in red for the fifth consecutive session. There was no market moving news which left investors ponder. The sentiments were not that strong as such the markets closed with marginal losses. Despite housing stimulus provisions, pending home sales in January declined 7.7%. The consensus estimate called for a 3.5% decline. The data reflect the effects of ongoing job losses, lost wealth, and weak consumer confidence. Auto sales were very weak as Ford Motor reported February sales in North America fell roughly 48%, which is steeper than the 42% drop that was expected. General Motors on the other hand reported February sales sank nearly 53%, exceeding the 45% fall that was widely forecast. US light crude oil for April delivery rose by $1.50 to settle at $41.65 a barrel on the New York Mercantile Exchange. The crude prices rose on expectations that OPEC will again cut production.

The Dow Jones Industrial Average (DJIA) declined by 37.27 points to close at 6,726.02. The NASDAQ Composite (RIXF) index fell by 1.84 points to close at 1,321.01 and the S&P 500 (SPX) fell by 4.49 points to close at 696.33.

Today major stock markets in Asia are trading positive. Shanghai composite is up 55.12 points to 2,126.55 along with Hang Seng is trading higher by 89.85 points at 12,123.73 and South Korea''s Seoul Composite is up by 16.36 points at 1,041.93. Japan''s Nikkei is also up by 18.02 points at 7,247.74 and Singapore''s Straits Times is flat at 1,529.15.

Indian ADRs closed mixed. In technology sector, Wipro ended up by 4.28% along with Infosys by 1.32%. Further, Satyam lost 4.32% and Patni Computers closed down by 0.46%. In banking sector ICICI Bank and HDFC Bank gained 1.18% and 2.85% respectively. In telecommunication sector, MTNL lost 3.57% while Tata Communication advanced by 2.52%. Sterlite Industries increased by 4.22%.

The FIIs on Tuesday stood as net sellers in equity and net buyer in debt. Gross equity purchased stood at Rs 831.50 Crore and gross debt purchased stood at Rs 450.20 Crore, while the gross equity sold stood at Rs 1,309.40 Crore and gross debt sold stood at Rs. 201.70 Crore. Therefore, the net investment of equity and debt reported were Rs (477.90) Crore and Rs 248.50 Crore respectively.

On Tuesday, the Indian rupee closed at 51.95/97, 0.11% weaker than its previous close of 51.90/92. Sporadic dollar selling by the central bank helped curb the further downfall of rupee, as domestic stock markets are plummeting causing further concern of dollar outflow.

On BSE, total number of shares traded were 20.97 Crore and total turnover stood at Rs 2,550.79 Crore. On NSE, total number of shares traded were 48.24 Crore and total turnover was Rs 7,495.88 Crore.

Top traded volumes on NSE Nifty – Unitech with 32283274 shares, ICICI Bank with 24423234, Suzlon Energy with 20736791 shares, Reliance Petro with 17430393 shares followed by SAIL with 12145373 shares.

On NSE Future and Options, total number of contracts traded in index futures was 949457 with a total turnover of Rs 11,976.51 Crore. Along with this total number of contracts traded in stock futures were 392031 with a total turnover of Rs 10,400.93 Crore. Total numbers of contracts for index options were 1312770 with a total turnover of Rs 17,891.04 Crore and total numbers of contracts for stock options were 34513 and notional turnover was Rs 1,029 Crore.

Today, Nifty would have a support at 2,595 and resistance at 2,689 and BSE Sensex has support at 8,388 and resistance at 8,512.