Pre Session Commentary - Sep 24 2008

The Market is expected to have negative opening due to weak cues from the global markets as US markets closed in red and Asian markets are trading mixed. On Tuesday, the Indian markets closed deep into red on US bailout concerns as is an uncertainty on the details regarding the U.S. government’s $700 billion plan to fix the financial market turmoil and the two major Wall Street investment banks Goldman Sachs and Morgan Stanley, converted to a traditional banking structure. Crude oil also weighs on the sentiments. Domestic markets opened sharply lower and continued to trade on negative terrain on weak global cues. Though markets struggled to recover during early trade but were not able to maintain the strength and skid further. Finally markets ended with huge losses on profit booking over the counters. BSE Sensex ended below 13,600 level and NSE Nifty below 4,150 mark. From the sectoral front, all of the indices ended in red and among those, Bank, Capital Goods, Metal, Reality, IT and Oil & Gas stocks contributed to most of the selling pressure. Mid cap and Small cap stocks also crushed during the trading session as ended with loss of more than 2% and 1% respectively. We expect that the market remain volatile during the trading session.

The BSE Sensex closed lower by 424.65 points at 13,570.31 and NSE Nifty ended down by 96.15 points at 4,126.90. The BSE Mid Caps and Small Caps closed with losses of 107.65 points at 5,113.31 and by 101.14 points at 6,092.97. The BSE Sensex touched intraday high of 13,978.26 and intraday low of 13,543.67.

The BSE and NSE will extend their trading hours from today (24 September 2008) on account of disruption of satellite services due to sun outage. Trading will start as usual at 9.55 IST, but will be suspended between 11.25 IST and 12.10 IST. The day’s session will end at 16.15 IST. The new trading timing will be effective till 8 October 2008.

On Tuesday US Senate Foreign Relations Committee passed the Indo-US civilian nuclear deal with a majority of 19-2. With this first step is cleared and two steps are still pending as it is to be approved by House of Representatives.

On Tuesday, the US market closed lower due to nervousness about the proposed $700 billion bailout plan. There are concerns that congressional vote on proposed bailout may be delayed. However, crude oil for November delivery dropped $2.76 to settle at $106.61 on the New York Mercantile Exchange, after earlier touching the low of $104.05.

The Dow Jones Industrial Average (DJIA) closed down by 161.52 points at 10,854.17 followed by the NASDAQ index closed lower by 25.65 points at 2,153.33 and the S&P 500 (SPX) dropped by 18.87 points to close at 1,188.22.

Indian ADRs ended mixed. In technology sector, Satyam closed down by (6.38%) followed by Infosys by (4.76%), Patni Computers by (2.83%) and Wipro by (2.76%). In banking sector HDFC Bank and ICICI Bank gained (5.72%) and (0.78%). In telecommunication sector, MTNL and Tata Communication advanced by (5.37%) and (1.21%). Sterlite Industries plunged (0.80%).

Today the major stock markets in Asia are trading mixed. Hang Seng index is trading up by 295.73 points at 19,168.58 along with Singapore''s Straits rose 2.17 points at 2,478.68, while Japan''s Nikkei slipped 140.19 points at 11,950.40 and Taiwan Weighted trading at 6,146.11 plunged 36.10 points.

The FIIs on Tuesday stood as net buyer in equity and in debt. Gross equity purchased stood at Rs3,245.30 Crore and gross debt purchased stood at Rs232.50 Crore while the gross equity sold stood at Rs3,134.00 Crore and gross debt sold stood at Rs139.80 Crore. Therefore, the net investment of equity reported was Rs111.40 Crore and net debt was Rs92.60 Crore.

On Tuesday, the Indian rupee closed lower due to fall in local stocks and dollar demand from oil importers and arbitrageurs, to 45.73 per dollar against Monday''s close of 45.44/45. Earlier it opened at 45.36/37 and moved in a range of 45.36 and 45.70 in morning trade.

Today, Nifty has support at 4,043 and resistance at 4,215 and BSE Sensex has support at 13,276 and resistance at 13,882.