Pre Session Commentary - Aug 20 2008

The Indian Market is expected to have negative opening on weak global cues as US markets closed lower and Asian markets are trading weak along with rise in crude oil prices. On Tuesday, the market closed with marginal losses after recovering from days low. The domestic market opened on weak note tracking unfavorable cues from the global markets. Further market continued to trade in negative territory due to huge selling over the counters. Weak European markets along with fears of more losses from the US mortgage crisis also fueled to the negative sentiments. Due to some bouts of buying during last hour of trading, market pared its losses to close with minimum gap. NSE Nifty ended below 4,400 mark and BSE Sensex below 14,600 level. From the sectoral front, most of the indices closed in red and among that, Metal, Consumer Durable, IT and Auto stocks contributed to the most of the selling in market. However, Power and Bank stocks were in limelight as were able to gain market favor. The BSE Sensex closed lower by 101.93 points at 14,543.73 and NSE Nifty ended down by 24.80 points at 4,368.25. The BSE Mid Caps and Small Cap closed with losses of 15.48 points and 23.87 points at 5,766.32 and 7,012.74 respectively. We expect that market may remain volatile during the trading session.

On Tuesday, the US market was closed lower on continued concerns regarding financials along with rise in wholesale inflation and a rebound in crude oil prices. PPI Inflation rose 1.2% in July (consensus 0.6%) and core PPI, which excludes food and energy, rose 0.7% (consensus 0.2%). That leaves the YoY increase in total PPI at 9.8%, which is the highest since 1981. Crude oil ended above $115 a barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed lower by 130.84 points to close at 11,348.55. The NASDAQ index decreased by 32.62 points to close at 2,384.36 and the S&P 500 (SPX) fell 11.91 points to close at 1,266.69.

Indian ADRs ended down. In technology sector, Wipro ended higher by (0.78%), while Satyam dropped by (2.67%) along with Infosys by (2.06%) and Patni Computers by (1.16%). In banking sector ICICI bank and HDFC Bank reported marginal gain by (0.10%) and (0.01%). In telecommunication sector, MTNL dropped by (3.07%) along with Tata Communication by (0.26%). Sterlite industries decreased by (0.07%).

Today the major stock markets in Asia are trading weak following the fall on Wall Street overnight. Hang Seng index is trading marginally higher by 38.22 points at 20,522.59 while Taiwan Weighted trading down by 56.03 points at 6,922.57, Japan’s Nikkei trading 12,826.54 dropped by 36.51 points and Singapore''s Straits Times is down by 5.04 points at 2,733.43.

India''s rupee declined for a sixth day, on speculation stock losses will spur investors to reduce local assets. The rupee closed at 43.61 a dollar, the lowest since March 29, 2007, as against 43.59 of Monday.

Today, Nifty has support at 4,276 and resistance at 4,432 and BSE Sensex has support at 14,204 and resistance at 14,812.