Pre Session Commentary - July 18 2008

The Indian Market is expected to have positive opening on the back of strong global cues as US market extended its rally for the second consecutive session and Asian markets are also trading strong. On Thursday, the Indian market ended with heavy gains powered by favorable Asian markets and drop in crude prices. The domestic market opened with upbeat note, on the back of positive cues from the global markets. Further market continued to trade in positive territory and extended its strength to close with handsome gains. The BSE Sensex ended above 13,100 level with gain of more than 4% and NSE Nifty closed above 3,900 with increase of more than 3%. From the sectoral front, the Bank index closed with a gain of more than 6% after it completely crushed for the last two days. On the other hand Metal index witnessed selling pressure to close with a loss of 2%. However, sustained buying interest was seen in Capital Goods, Bank, Capital Goods, Oil & Gas and Reality stocks. The BSE Sensex closed higher by 536.05 points at 13,111.85 and NSE Nifty ended up by 130.50 points at 3,947.20. We expect that market may gain some ground during the trading session.

Due to the concern of leakage of sensitive data on price rise, the government had released the inflation figures on Thursday (July 17th) against the current practice of announcing it on Fridays. Henceforth, the wholesale price-based inflation data would be released at 5 pm on every Thursday. The wholesale price index based annual rate of inflation rose to 11.91% for the week ended 5th July 2008, marginally higher than the 11.89% of the previous week. The annual inflation rate was 4.61% during the corresponding week last year.

On Thursday, the US market closed in green as drop in energy prices boosted an already upbeat mood that followed stronger than expected quarterly reports from big names like JP Morgan Chase and United Technologies. Crude oil fell $5.31 to settle at $129.29. Stronger than expected data on the U.S. housing and job markets also added to positive sentiment. Initial jobless claims gained 18,000 to 366,000 in the week ended July 12. Housing starts rose 9.1 percent to a 1.066 million pace from a revised 977,000 rate in May.

The Dow Jones Industrial Average (DJIA) closed higher by 207.38 points at 11,446.66 along with NASDAQ up by 27.45 points at 2,312.30 and S&P 500 index closed higher by 14.96 points at 1,260.32.

Indian ADRs ended up. In technology sector, Patni Computers ended higher by (4.08%) along with Satyam by (3.58%), Infosys by (1.48%) and Wipro advanced by (1.18%). In banking sector, ICICI bank and HDFC bank gained (9.47%) and (6.95%) respectively. In telecommunication sector, Tata Communication ended up by (1.28%) while MTNL closed lower by (1.07%)). Sterlite In decreased increased by (5.15%).

Today the major stock markets in Asia are trading in green due to the 10% decline in oil prices this week and results from investment bank JPMorgan that were not as bad as expected. Hang Seng index is trading higher by 174.70 points at 21,909.42 along with Japan’s Nikkei trading up by 50.34 points at 12,938.29 and Taiwan Weighted trading at 6,998.92 advanced by 24.40 points.

The FIIs on Thursday stood as net seller in equity and in debt. The gross equity purchased was Rs2,693.00 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs2,903.50 Crore and gross debt sold stood at Rs168.10 Crore. Therefore, the net investment of equity reported was (Rs210.50) Crore and net debt was (Rs168.10) Crore.

Today, Nifty has support at 3,879 and resistance at 4,092 and BSE Sensex has support at 12,844 and resistance at 13,618.