Pre Session Commentary - March 5 2009

Today domestic markets are likely to open positive as the RBI has reduced the Repo and Reverse Repo rates by 50bps each to 5% and 3.5% from the previous 5.5% and 4% respectively. This rate cut would probably bring down the borrowing cost of commercial banks and simultaneously the banks may pass on the benefit to the final consumers by reducing their PLR. Besides, the phenomenal positive closing of the US markets is likely to spur positive sentiments in domestic arena. The Asian markets have however opened with less zeal, but in the domestic markets one could anticipate some fresh buying sentiments along with the essence of volatility.

On Wednesday, the domestic markets traded highly volatile but managed to close in green. Since the opening bell the investors were not sure of any movements as there was no specific news to support the trend. The sense of fear and anxiety was visible from the northward and southward movement of the benchmark indices. The Asian and European markets had similar kind of trade and therefore the global cues kept the investors dump. Sectors like Metal, Oil & Gas, HC and Auto were up by 2.80%, 1.15%, 1.05% and 0.92% respectively. On the other sectors like Bankex, CD, CG and Power closed with losses of 1.50%, 1.46%, 0.34% and 0.09% respectively. During the session we expect the markets to be trading positive with an essence of volatility.

The BSE Sensex closed high by 19.20 points at 8,446.49 and NSE Nifty ended up by 22.80 points at 2,645.20. The BSE Small cap and Mid Cap closed with losses of 8.77 points and 19.39 points at 2,648.36 and 2,990.17 respectively. The BSE Sensex touched intraday high of 8,501.46 and intraday low of 8,373.24.

On Wednesday, the US stock markets closed in green after snapping the fifth consecutive losing streak. Investors resorted to fresh buying and short covering as many stocks had fallen nearly 10% in the continuous five day southward trade. On the other hand the US investors responded positively to the news that China will add nearly $586 billion to its fiscal plan and industrial heavyweights would be the primary beneficiary. On the dark side, according to the latest ADP Employment Report, 697,000 jobs were lost in February. The consensus estimate called for 630,000 job losses. The ADP report isn''t always precise in counting job losses, but has been accurate in forecasting trends. US light crude oil for April delivery rose by $3.73 to settle at $45.38 a barrel on the New York Mercantile Exchange. The crude prices rose on the back of the government''s weekly supply report showed that crude stockpiles decreased by 700,000 barrels in the week ended Feb. 27, 2009.

The Dow Jones Industrial Average (DJIA) inclined by 149.82 points to close at 6,875.84 The NASDAQ Composite (RIXF) index inclined by 32.73 points to close at 1,353.74 and the S&P 500 (SPX) grew by 16.54 points to close at 712.87.

Today major stock markets in Asia are trading positive. Shanghai composite is up by 39.50 points to 2,237.61 along with Hang Seng that is trading higher by 14.81 points at 12,345.96 and South Korea''s Seoul Composite is up by 4.45 points at 1,063.71. Japan''s Nikkei is also up by 197.62 points at 7,488.58 and Singapore''s Straits Times is flat at 1,537.48.

Indian ADRs closed higher. In technology sector, Wipro ended up by 7.09% along with Infosys by 4.33%. Further, Satyam lost 1.50% while Patni Computers closed up by 5.57%. In banking sector ICICI Bank and HDFC Bank gained 4.04% and 3.86% respectively. In telecommunication sector, MTNL advanced by 4.12% and Tata Communication gained 3.85%. Sterlite Industries increased by 8.76%.

The FIIs on Wednesday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 651.10 Crore and gross debt purchased stood at Rs 237.20 Crore, while the gross equity sold stood at Rs 1,297.40 Crore and gross debt sold stood at Rs. 426.30 Crore. Therefore, the net investment of equity and debt reported were Rs (646.30) Crore and Rs (189.20) Crore respectively.

On Wednesday, the Indian rupee closed at 51.53/55, 0.8% weaker than its previous close of 51.95/97. The concerns of falling stock markets and apprehensions about foreign money inflow pulled the rupee for the eight day session.

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 46.47 Crore and total turnover was Rs 7,777.36 Crore.

Top traded volumes on NSE Nifty – ICICI Bank with 25291532, Unitech with 23795640 shares, SAIL with 20069928 shares, Suzlon with 14257423 shares followed by Tata Steel with 12273535 shares.

On NSE Future and Options, total number of contracts traded in index futures was 929572 with a total turnover of Rs 11,575.71 Crore. Along with this total number of contracts traded in stock futures were 411341 with a total turnover of Rs 11,030.52 Crore. Total numbers of contracts for index options were 1263218 with a total turnover of Rs 16,913.93 Crore and total numbers of contracts for stock options were 37197 and notional turnover was Rs 1,104.26 Crore.

Today, Nifty would have a support at 2,612 and resistance at 2,703 and BSE Sensex has support at 8,394 and resistance at 8,573.