Pre Session Commentary - Sep 1 2008

The Indian Market is expected to have negative opening as US markets ended lower and Asian markets are trading down. On Friday, domestic market closed with handsome gains tracing positive cues from global markets along with drop in crude oil and eased inflation for the week ended 16th August 2008. India''s inflation falls to 12.40% during the week ended August 16 2008, as against 12.63% in the previous week. Market opened with gains tracking positive cues from global markets along with relieved inflation number. Further domestic market continued its northward journey despite slower Q1 GDP growth. India’s Q1 GDP growth slows to 7.9% from 8.8% of previous quarter. Finally, market rallied sharply during final trade to end with heavy gains. NSE Nifty ended above 4,300 mark and BSE Sensex crossed 14,500 level. From the sectoral front, all indices closed in green and among that Bank stocks outperformed as closed with increase of more than 6%. Along with this Metal, Capital Goods, Oil & Gas, Reality and Consumer Durable stocks were in limelight as witnessed most of the buying from these baskets. The BSE Sensex closed higher by 516.19 points at 14,564.53 and NSE Nifty ended up by 146 points at 4,360. The BSE Mid Caps and Small Caps ended with gains of 133.44 points and 109.34 points at 5,742.29 and 6,891.64. We expect that market gave up its Friday''s gains during the trading session.

India’s Q1 GDP growth slows to 7.9% from 8.8% of previous quarter as industrial activity slowed due to monetary tightening.

On Friday, the US market was closed lower as consumer spending slumped and Dell missed earnings estimate. There were weak reports on personal income. Rise in the price of oil also added to the sell off. Retail gasoline prices rose for the first time in 1.5 months. Oil prices jumped 2.7% during the session, but retreated to finish virtually unchanged near $115.65 per barrel. U.S. markets will be closed on Monday for Labor Day.

The Dow Jones Industrial Average (DJIA) closed lower by 171.63 points to close at 11,543.55 along with the NASDAQ index ended down by 44.12 points to close at 2,364.52 and the S&P 500 (SPX) lost 17.85 points to close at 1,282.83.

Indian ADRs ended mixed. In technology sector, Satyam ended higher by (2.58%) followed by Patni Computers surged by (0.09%), while Infosys dropped by (0.29%) and Wipro by (0.09%). In banking sector ICICI Bank gained (0.71%) while HDFC Bank lost (0.39%). In telecommunication sector, Tata Communication ended up by (1.69%) while MTNL dropped by (0.21%). However, Sterlite industries remained unchanged.

Today the major stock markets in Asia are trading weak. Hang Seng index is trading lower by 364.27 points at 20,897.62 along with Taiwan Weighted trading down by 199.40 points at 6,846.71, Japan’s Nikkei dropped by 176.00 points at 12,896.87 and Singapore''s Straits Times lost 33.34 points at 2,706.61.

The FIIs on Friday stood as net buyer in equity and in debt. The gross equity purchased was Rs3,403.30 Crore and the gross debt purchased was Rs246.00 Crore while the gross equity sold stood at Rs3,259.50 Crore and gross debt sold stood at Rs98.50 Crore. Therefore, the net investment of equity reported was Rs143.80 Crore and net debt was Rs147.50 Crore.

The partially convertible rupee ended at 43.93/94 per dollar, 0.35% weaker than Thursday’s close of 43.78/79. It had hit a 17 month low of 44.26 earlier in the week.

Today, Nifty has support at 4,238 and resistance at 4,418 and BSE Sensex has support at 14,157 and resistance at 14,801.