Pre Session Commentary - July 8 2009

Today domestic markets are likely to open negative as majority of Asian markets have opened with huge blood bath on the back of losses in US markets last night. The US markets fell on concerns of low spending in the technology space, which has been predicted by Gartner Inc. to fall by nearly 6 per cent. The sentiments across the globe are weak and therefore one would witness bearishness prevailing across the broader level in domestic arena. Yesterday’s minimal rebound exudes signs of immense cautiousness amongst investors.

On Tuesday, domestic markets closed with moderate gains. The positive gap up opening turned choppy amidst weak sentiments and cautiousness in traders. Yesterday’s huge losses paved way for some value buying in key sectors however volatility was inevitable at broader level. However after the post mid session, European markets provided a lot of support to domestic sentiments. Sectors like Auto, FMCG, CG and Power managed to record gains of 3.92%, 3.83%, 1.67% and 0.97% respectively. BSE Midcap ended with a gain of 0.92% and Smallcap closed with a loss of 0.33%. Today domestic markets are likely to trade range bound.

The BSE Sensex closed high by 127.05 points at 14,170.45 and NSE Nifty ended with a gain of 36.45 points at 4,202.15. BSE Mid Cap closed with gain of 45.46 points at 4,964.34 and Small Cap closed with a marginal loss of 18.60 points at 5,544.27 respectively. The BSE Sensex touched intraday high of 14,251.88 and intraday low of 14,000.68.

On Tuesday, US Markets closed with huge losses. The S&P 500 plunged to its lowest since May 1, ’09 due to concerns of slow spending in the technology sector. The further apprehensions are about the second quarter results of the technology sector. Microsoft and Google Inc. conceded more than 2.8 per cent after researcher Gartner Inc. predicted spending on information technology will plummet by 6 per cent this year. On the other hand Discover Financial Services fell by 11 per cent on plans to sell $500 million in shares. US light crude oil for August Futures delivery declined by 1.8 per cent at $62.93 per barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) fell by 161.27 points at 8,163.60. NASDAQ index declined by 41.23 points at 1,746.17 and the S&P 500 (SPX) fell by 17.69 points to close at 881.03 points.

Indian ADRs ended mostly down on Tuesday. In the Banking space, ICICI Bank was down 0.21% and HDFC Bank was down 1.08%. In the telecom sector, MTNL was up 1.49% but Tata Comm was down 2.285. In the IT space, Infosys was down 1.43%, Wipro was down 1.24%, Patni was down 1.68%. However, Satyam was up 1.83%. In the other space, Sterlite was down 2.57%, Dr Reddys was up 0.49% and Tata Motors was down 2.26%.

Today major stock markets in Asia are trading low. Hang Seng is low by 348.07 points at 17,514.20. Japan''s Nikkei is trading down by 226.35 points at 9,557.39.

On Tuesday, the partially convertible rupee ended at Rs 48.45/46, 0.2% stronger than its previous close at 48.56/59. The rupee gained strength on the back of rise in local stock markets.

The FIIs on Tuesday stood as net sellers in equity and net buyer in debt. Gross equity purchased stood at Rs 3,189.50 Crore and gross debt purchased stood at Rs 1,184.00 Crore while the gross equity sold stood at Rs 3,540.80 Crore and gross debt sold stood at Rs 10.00 Crore. Therefore, the net investment of equity reported was Rs (351.40) Crore and net debt was Rs 1,174.00 Crore.

On BSE, total number of shares traded were 37.88 Crore and total turnover stood at Rs 5,304.88 Crore. On NSE, total number of shares traded was 84.71 Crore and total turnover was Rs 17,255.88 Crore.

Top traded volumes on NSE Nifty – Unitech with total volume traded 62718092 shares, followed by Suzlon Energy with 46628097, DLF with 17682445, ITC with 17610178 and ICICI Bank with 11712721 shares.

On NSE Future and Options, total number of contracts traded in index futures was 799497 with a total turnover of Rs 16,089.08 Crore. Along with this total number of contracts traded in stock futures were 576819 with a total turnover of Rs 15,764.94 crore. Total numbers of contracts for index options were 1245421 with a total turnover of Rs 26,996.37 Crore and total numbers of contracts for stock options were 46056 and notional turnover was Rs 1,372.25 Crore.

Today, Nifty would have a support at 4,085 and resistance at 4,157 and BSE Sensex has support at 13,710 and resistance at 14,052.