Pre Session Commentary - July 31 2008

The Indian Market is expected to have positive opening as US markets closed with gains and Asian markets are trading mixed. On Wednesday, the Indian market closed heavy gains due to strong buying over the counters led by favorable global cues global cues and steep drop in crude oil price. The domestic market opened sharply higher tracking strong cues from the global markets. Further, market traded sharply higher without any sign of weakness and continued to gain ground through out of the trading session. NSE Nifty gained around 3% and ended above 4,300 mark and BSE Sensex closed with gains of more than 3% and ended above 14,200 level. All indices except FMCG closed in green. Out of which, Bank and Reality indices rallied to close with a gain of more than 5%. Along with this, the Metal, Capital Goods, Oil & Gas, IT and Power stocks also witnessed sustained buying from these baskets. The BSE Sensex closed higher by 495.67 points at 14,287.21 and NSE Nifty ended up by 127.35 points at 4,317.20. We expect that market may remain volatile during the trading session ahead of F&O expiry day and inflation number for the week ended 19th July 2008, which has to come out today evening.

On Wednesday, the US market was closed with gains influenced by the latest ADP employment report that showed an unexpected 9,000 increase in July private non-farm jobs. A news about Fed’s extension of the length of its Term Securities Lending Facility program also added positive sentiment. These entire positive cues off sets the surge in crude. Crude advanced $4.58 to settle at $126.77 a barrel on the NYMEX.

The Dow Jones Industrial Average (DJIA) closed higher by 186.13 points at 11,583.69 along with S&P 500 index ended up by 21.06 points at 1,284.26 and NASDAQ closed higher by 10.10 points at 2,329.72.

Indian ADRs ended mixed. In technology sector, Patni Computers ended lower by (4.93%) along with Infosys by (0.69%) and Satyam by (0.40%) while Patni Computers remained unchanged. In banking sector, HDFC bank and ICICI bank dropped (2.03%) and (1.45%) respectively. In telecommunication sector, Tata Communication ended up by (3.49%) along with MTNL by (3.02%). Sterlite industries increased by (7.83%).

Today the major stock markets in Asia are trading mixed. Hang Seng index is trading higher by 68.19 points at 22,758.79 along with Taiwan Weighted trading up by 18.93 points at 7,089.28 while Japan’s Nikkei dropped 78.93 points at 13,288.86.

The FIIs on Wednesday stood as net seller in equity and net buyer in debt. The gross equity purchased was Rs2,312.70 Crore and the gross debt purchased was Rs159.30 Crore while the gross equity sold stood at Rs2,3645.00 Crore and gross debt sold stood at Rs33.40 Crore. Therefore, the net investment of equity reported was (Rs332.30) Crore and net debt was Rs125.90 Crore.

Today, Nifty has support at 4,227 and resistance at 4,408 and BSE Sensex has support at 13,989 and resistance at 14,627.