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Thursday, August 14, 2008

Pre Session Commentary - Aug 14 2008


The Indian Market is expected to have negative opening on weak global cues as US markets closed on downbeat note and Asian markets are trading lower. On Wednesday, the Indian market closed with losses on the back of intense profit booking that was seen in key stocks ahead of SEBI meeting scheduled on 13th August to review the regulatory framework governing P-notes. Weak cues from European markets also dampened investor sentiment. The domestic market opened weak tracking cues from the global markets. Market slipped further to continue in negative territory. Further it continued to lose ground till the end of session. Investors were cautious on SEBI meet on participatory notes. NSE Nifty ended below 4,600 mark and BSE Sensex below 15,100 level. From the sectoral front, interest sensitive sectors like Bank and Realty along with Capital goods and Consumer Durables were under selling pressure while IT, Pharma and FMCG stocks gained the ground. The BSE Sensex closed lower by 119.01 points at 15,093.12 and NSE Nifty ended down by 23.20 points at 4,529.05. The BSE Mid Caps closed with losses of 6.16 points at 5,929.37 while Small Caps closed with gains of 9.35 points at 7,229.77.

We expect that market may remain voaltile during the trading session. Also, the inflation number for the week ended 26th July 2008, due to be released today evening will be a major concern for the market.

SEBI meeting was scheduled yeasterday to review the regulatory framework governing P-notes. SEBI has brought down the timeline for rights issue of shares. Rights issues could now be completed in just 43 days after filing, instead of the existing 109 days.

On Wednesday, the US market was closed lower with loss in economic sector led fresh worries about the financial sector and rise in crude oil. Crude prices rallied 2.9% to $116.31 per barrel after U.S. government data showed that crude stockpiles unexpectedly declined and gasoline inventory levels posted a steep drop.

The Dow Jones Industrial Average (DJIA) closed lower by 109.51 points at 11,532.96 along with S&P 500 index closed down by 3.76 points at 1,285.83 and NASDAQ closed at 2,428.62 lower by 1.99 points.

Indian ADRs ended mixed. In technology sector, Infosys ended higher by (0.88%) while Patni Computers dropped by (2.38%) along with Wipro by (1.06%) and Satyam by (0.97%). In banking sector, HDFC bank and ICICI bank lost (4.02%) and (1.96%) respectively. In telecommunication sector, MTNL gained (1.35%) while Tata Communication ended down by (0.87%). However, Sterlite industries increased by (3.61%).

Today the major stock markets in Asia are trading Mixed. Japan’s Nikkei is trading lower by 39.16 points at 12,983.89 along with Hang Seng index trading down by 27.67 points at 21,265.65, Taiwan Weighted trading at 7,282.27 dropped by 10.07 points and Singapore''s Straits Times is flat at 2,811.45. However, Seoul Composite gained 2.38 points at 1,565.1.

The FIIs on Wednesday stood as net seller in equity and net buyer in debt. The gross equity purchased was Rs2,636.50 Crore and the gross debt purchased was Rs354.50 Crore while the gross equity sold stood at Rs3,020.80 Crore and gross debt sold stood at Rs0.00 Crore. Therefore, the net investment of equity reported was (Rs384.30) Crore and net debt was Rs354.50 Crore.

The Indian rupee on Wednesday ended at 42.65/66 per dollar, off a low of 42.77, its weakest since July 29, and 0.7% weaker than 42.37/38 at close on Tuesday

Today, Nifty has support at 4,445 and resistance at 4,598 and BSE Sensex has support at 14,795 and resistance at 15,368.