Post Session Commentary - May 28 2008

The Indian Market is expected to open positive on the back of supportive global cues as the US market closed in green and crude oil prices slipped below $129 a barrel. On Tuesday, the domestic markets closed in negative after pairing all its initial gains as the profit booking at the final hours prevailed. The market opened with handsome gains and continued to show upbeat attitude till afternoon but was not able to sustain the momentum. Investors’ cautious behavior led the market to take U turn after mid session and forced to close in red. The banking, oil & gas and reality stocks were not in favor as most selling was reported from these baskets. While IT stocks were in renown as investors were supporting this index. The BSE Sensex closed lower by 72.91 points at 16,275.59 and NSE Nifty fell by 15.25 points to close at 4,859.80. We expect that the market may remain volatile during the trading session.

Bond yields increased to fresh one-month highs on Wednesday as tight cash conditions and high inflation reduced investor demand for debt. The 10-year benchmark bond yield closed at 8.11% on Tuesday, which is highest since 29th April and also higher from Monday’s close at 8.04%.

On Tuesday, the US market closed in green. The Dow Jones Industrial Average (DJIA) closed higher by 68.72 points at 12,548.35 along with NASDAQ advanced by 36.57 points to close at 2,481.24 and S&P 500 up by 9.42 points to close at 1,385.35.

Indian ADRs ended mixed. In technology sector, Satyam was higher by (3.36%) along with Wipro by (3.19%), Patni Computers by (1.96%) and Infosys by (1.90%). In banking sector, ICICI bank and HDFC bank dropped by (4.26%) and (1.94%) respectively. In telecommunication sector, MTNL slipped by (3.26%) and Tata Communication was up by (2.95%). Sterlite industries fell by (0.42%).

Today the major stock markets in Asia are trading in mixed. Japan’s Nikkei is trading lower by 56.78 points at 13,836.53 along with Hang Seng index trading down by 25.82 points at 24,256.22 and Taiwan Weighted trading at 8,753.76 down by 24.63 points. However, Straits Times jumped by 10.75 points at 3,126.10 and Shanghai Composite was up by 14.37 points at 3,389.78.

The FIIs on Wednesday stood as net seller in equity and debt. The gross equity purchased was Rs2,144.800 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs3,259.90 Crore and gross debt sold stood at Rs14.90 Crore. Therefore, the net investment of equity reported was (Rs115.00 Crore) and net debt was (Rs14.90 Crore).

Today, Nifty has support at 4,763 and resistance at 4,931 and BSE Sensex has support at 16,020 and resistance at 16,564.