Pre Session Commentary - Nov 20 2008

Today Markets are likely to open with heavy blood bath as US markets ended in deep red and other Asian markets have also opened with heavy losses. The US economic forecasts are very poor, which could affect the markets sentiments of various other nations severely. Apart from the weak global cues, the domestic economic scenario is not very encouraging to support the weak markets sentiments. Today one could witness the markets to be trading in deep red amidst weak sentiments across the markets around the world.

On Wednesday, domestic Markets opened positive but could not retain its charm till the end. The early gains were later paired off heavily and the markets plunged into red territory. The sentiments got worst after the post mid session as investors started booking profits. Sensex and Nifty fell by 1.83% and 1.79% respectively. CG, Bankex and Power were the worst hit as they fell by 3.47%, 2.86%, 2.68% respectively. During the trading session we expect the market to be trading in deep red.

The BSE Sensex closed lower by 163.42 points at 8,773.78 and NSE Nifty ended lower by 48.15 points at 2,635.00. The BSE Mid Caps and Small Caps closed with losses of 61.93 points at 2,998.39 and by 65.54 points at 3,493.12. The BSE Sensex touched intraday high of 9,236.27 and intraday low of 8,726.80.

On Wednesday, US markets fell drastically on weak macro economic data. The CPI numbers have fallen by 1% as energy prices fell by 8.6%. Fed has reduced forecasts for GDP growth and inflation amidst concerns of economic slowdown. The housing construction data fell to lowest on records. For 2008, the Fed expects the economy will grow between 0.0% and 0.3%, down sharply from its previous forecast of 1.0% to 1.6%. The 2009 forecast now calls for growth between -0.2% and 1.1%, down from the previous forecast of 2.0% to 2.8%. The Fed also raised its unemployment forecast. Crude oil futures for the December delivery fell by $68 cents or 1.3% to $52.94 a barrel on New York Mercantile Exchange. The EIA on Wednesday reported that the demand fell by 7% against year ago as consumptions have shrunken due to economic crisis.

The Dow Jones Industrial Average (DJIA) closed lower by 427.47 points at 7997.28 NASDAQ index lost 96.85 points at 1,386.42 and the S&P 500 (SPX) also closed lower by 52.54 points to close at 806.58 points.

Indian ADRs ended negative. In technology sector, Infosys fell by (7.25%) and Wipro ended low by (6.74%) followed by Satyam that ended low by (6.09%) and Patni Computers closing low by (4.20%). In banking sector ICICI Bank was low by (13.63%), while HDFC Bank fell (10.14%). In telecommunication sector, Tata Communication declined by (14.97%), while MTNL declined by (6.33%). Sterlite Industries was low by (4.97%).

Today the major stock markets in Asia opened negative. The Shanghai Composite is trading low by 5.85 at 2,011.62. Hang Seng is low by 649.39 points at 12,166.41. Further Japan''s Nikkei is low by 357.59 points at 7,915.63. Straits Times is also trading low by 43.05 points at 1,622.54 and South Korea’s Seoul Composite is low by 45.57 points at 971.25.

The FIIs on Wednesday stood as net sellers in equity and debt. The Gross equity purchased stood at Rs 1,137.60 Crore and gross debt purchased stood at Rs 29.60 Crore, while the gross equity sold stood at Rs 1,506.90 Crore and gross debt sold stood at Rs 243.70 Crore. Therefore, the net investment of equity and debt reported were (Rs 369.30) Crore and (Rs 214.10) Crore respectively.

On Wednesday, the partially convertible rupee ended at 50.02/03 per dollar, weaker by 0.7% on Tuesday’s closing at 49.66/67. The concerns of falling stock markets and off-shore dollar demand have hurt the rupee badly.

On BSE, total number of shares traded was 24.07 Crore and total turnover stood at Rs 3,545.97 Crore. On NSE, total volume of shares traded was 51.40 Crore and total turnover was Rs 9,286.43 Crore.

Top traded volumes on NSE Nifty – Suzlon Energy with total volume traded 39584638, followed by SAIL with 19132332, Unitech with 17824847, ICICI Bank with 11769881, Reliance Petro with 11254154 and Reliance with 10156564 shares.

On NSE Future and Options, total number of contracts traded in index futures was 1099000 with a total turnover for the same was Rs 13904.47 crores. Along with this total number of contracts traded in stock futures were 999188 with a total turnover of Rs 10027.8 Crore. Total numbers of contracts for index options were 1206852 and total turnover was Rs 17220.49 Crore and total numbers of contracts for stock options were 46937 and notional turnover was Rs 503.61 Crore.

Today, Nifty would have a support at 2,490 and resistance at 2,620 and BSE Sensex has support at 8,205 and resistance at 8,730.