Pre Session Commentary - Jan 5 2009

Today the markets are likely to open positive as the government on Friday evening announced its much awaited second stimulus package. In the second stimulus package NBFCs have been given an additional package of Rs 25,000 crore and the ECB norms have also been relaxed. The total financial package that the two stimulus would inject into the financial system is estimated to be Rs 3,00,000 crore. After the continuous softening of the inflation rates, RBI has cut CRR by 50 basis points to 5% and repo and reverse rate by 100 bps. The repo rate has been cut to 5.5% and the reverse repo has been cut to 4%. The LAF measures would pump Rs 20k crore into the system. The Asian markets are also trading firm with a positive trend. The macro economic sentiments are good and therefore we expect the markets to trade positive with a firm trend.

On Friday, the markets opened positive but turned choppy. However after the post mid session the sentiments remained high and therefore markets managed to close in green. The expectation of a fiscal package from the government was seen in the trade. This was the fourth day in the week when the markets showed some firmness despite global cues. Sensex and Nifty gained 0.55% and 0.44% respectively. Amidst expectations of a rate cut from RBI, rate sensitive sectors like CD, Realty and Bankex gained 2.44%, 2.07% and 1.60% respectively. During the session we expect the markets to be trading with a firm positive trend.

The BSE Sensex closed higher by 54.76 points at 9,958.22 and NSE Nifty ended higher by 13.30 points at 3,046.75. The BSE Mid Caps and Small Caps ended with gains of 72.08 points and 60.04 points at 3,391.18 and 3,870.45 respectively. The BSE Sensex touched intraday high of 10,070 and intraday low of 9,863.86.

On Friday, the US Markets closed in green. Despite lack of good news the markets showed phenomenal positive trade. All the major stocks encountered a bit of selling pressure in the first few minutes of action, but spent the rest of the session trending higher. Each of the major indices also finished near session highs. Energy stocks witnessed the biggest gains, closing 4.3% higher after oil prices reversed early losses. Such economic weakness was reflected in the worst ISM manufacturing reading since June 1980. The December reading came in at 32.4%. A number below 50% indicates a contraction. Crude oil futures for the month of February delivery rose $1.74 to $46.34 per barrel on New York Mercantile Exchange. The contract earlier hit an intraday low of $41.05 a barrel in electronic trading. The crude futures rose to their highest in three weeks on concerns that Russia''s move to cut off natural gas to Ukraine could affect European energy supplies.

The Dow Jones Industrial Average (DJIA) closed high with 258.30 points at 9,034.69 NASDAQ index gained 55.18 points at 1,632.21 and the S&P 500 (SPX) also closed higher by 28.55 points to close at 931.80 points.

Indian ADRs ended positive. In technology sector, Infosys gained by 2.36% and Wipro gained by 3.20%, further Satyam ended with a loss of 0.66% and Patni Computers closed high by 1.36%. In banking sector ICICI Bank gained 7.06%, HDFC Bank gained by 7.50%. In telecommunication sector, Tata Communication gained by 1.08%, while MTNL inclined by 3.47%.








Today the major stock markets in Asia have opened positive. The Shanghai Composite is trading high by 39.04 points at 1,859.84 Hang Seng is high by 188.97 points at 15,231.78. Further Japan''s Nikkei is high by 183.56 points at 9,043.12. South Korea’s Seoul Composite is high by 14.35 points at 1,171.53 and Singapore’s Strait Times is high by 28.01 points at 1,857.72.

The FIIs on Friday stood as net buyer in equity and net seller in debt. Gross equity purchased stood at Rs 292.00 Crore and gross debt purchased stood at Rs 0.00 Crore, while the gross equity sold stood at Rs 191.80 Crore and gross debt sold stood at Rs 0.10 Crore. Therefore, the net investment of equity and debt reported were Rs 100.20 Crore and Rs (0.10) Crore respectively.

On Friday, Indian Rupee for the day of the year closed 48.58/60 per dollar, 0.4% stronger than Thursday’s close of 48.76/78. The rupee gained strength after RBI reduced CRR and Repo rates. There are anticipations of some positive trend in the stock markets and the simultaneous inflow of foreign capital.

On BSE, total number of shares traded were 45.81 Crore and total turnover stood at Rs 4,279.80 Crore. On NSE, total number of shares traded were 88.01 Crore and total turnover was Rs 10,460.07Crore.

Top traded volumes on NSE Nifty – Unitech with 94765775 shares, Suzlon Energy with total volume traded 49190299 shares, Satyam with 32711371 shares followed by Reliance Petro with 18254969 shares and DLF with 12072825 shares.

On NSE Future and Options, total number of contracts traded in index futures was 719686 with a total turnover of Rs 10,127.72 Crore. Along with this total number of contracts traded in stock futures were 950712 with a total turnover of Rs 9,946.20 Crore. Total numbers of contracts for index options were 689273 with a total turnover of Rs 10,731.62 Crore and total numbers of contracts for stock options were 73326 and notional turnover was Rs 826.13 Crore.

Today, Nifty would have a support at 2,985 and resistance at 3,155 and BSE Sensex has support at 9,925 and resistance at 10,289.