Pre Session Commentary - Feb 19 2009

Today domestic markets are likely to open positive as investors had shown some buying interest on yesterday’s trade and major Asian markets like Shanghai Composite and Nikkei have opened in green. In the US, the government has given a bailout package of $275 billion for the housing sector and companies like Fannie Mae and Freddie Mac would get $100 billion for disbursal of fresh housing loans. The US markets also closed in mixed like our domestic markets. The influence of movements and cues of Asian and European markets are likely to tamper the domestic movements as well. Further, due to lack of any domestic news would make today’s trading session volatile.

On Wednesday, the markets opened negative amidst weak global cues, however it managed to recover its early losses and closed flat. The sentiments prevailing across the globe had little to influence the domestic sentiments, as phenomenal buying was witnessed across frontline stocks. These stocks had faced brutal thrash on the previous two days’ trade. Short covering also helped the markets bounce back a little. Sectors like Realty, Oil & Gas, Power, PSU and Auto witnessed buying as therefore gained by 3.18%, 1.39%, 0.51%, 0.39% and 0.27% respectively. On the other hand Banking and Consumer Durable sectors witnessed huge selling pressures as they lost 2.27% and 1.70% respectively. Mid caps and Small caps fell by 12.82% and 19.93% respectively. During the session we expect the markets to be trading volatile.

The BSE Sensex closed low by 19.82 points at 9,015.18 and NSE Nifty ended with a marginal gain of 5.65 points at 2,776.15. The BSE Mid Caps and Small Caps ended with losses of 12.82 points and 19.93 points at 2,844.30 and 3,226.06 respectively. The BSE Sensex touched intraday high of 9,113.92 and intraday low of 8,922.31.

On Wednesday, the US stock markets ended mixed after a choppy trading session. The news of some bail out package for the housing sector also helped the investor sentiments for a pull back. To bring back some charm on the mortgage market, the government is increasing funding to Fannie Mae and Freddie Mac by expanding the allowable size of the GSEs'' retained mortgage portfolios to $900 billion from $850 billion, while also purchasing Fannie Mae and Freddie Mac mortgage-backed securities. Fannie Mae and Freddie Mac will receive increased preferred stock purchase agreements from the Treasury as well. The company is likely to get $100 billion for fresh lending in the housing sector. On the other hand the Fed sees more contraction in the US economy and therefore calls for more stimulus packages. The General motor is planning for huge layoffs besides seeking for $30 billion from the government, including the $13.4 billion the company has already received. US light crude oil for March delivery fell by $0.31 to settle at $34.62 a barrel on the New York Mercantile Exchange. The March contract, which will expire on Friday, during the intraday traded in a range between $34.13 and $36.22.

The Dow Jones Industrial Average (DJIA) grew by 3.03 points to close at 7,555.63 The NASDAQ Composite (RIXF) index fell by 2.69 points to close at 1,467.97 and the S&P 500 (SPX) lost 0.75 points to close at 788.42.

Today major stock markets in Asia are trading mixed. Shanghai composite is up by 18.82 points to 2,228.68, Japan''s Nikkei is high by 37.93 points at 7,572.37. Hang Seng lost 26.24 points at 12,989.76, South Korea''s Seoul Composite is low by 3.54 points at 1,109.65 and Singapore''s Strait Times is lower by 15 points to 1,636.06.

Indian ADRs ended mixed. In technology sector, Satyam ended higher by 2.81%. Further, Wipro ended with decrease of 1.11%, while Infosys gained 0.24% and Patni Computers closed up by 3.12%. In banking sector HDFC Bank and ICICI Bank lost 2.72% and 2.52% respectively. In telecommunication sector, MTNL and Tata Communication dropped by 3.64% and 3.16% respectively. However, Sterlite Industries increased by 2.04%.

The FIIs on Wednesday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 1,132.60 Crore and gross debt purchased stood at Rs. 316.40 Crore, while the gross equity sold stood at Rs. 1,618.80 Crore and gross debt sold stood at Rs. 436.50 Crore. Therefore, the net investment of equity and debt reported were Rs (486.20) Crore and Rs (120.10) Crore respectively.

On Wednesday, the Indian rupee closed at 49.92/93, 0.5% weaker than its previous close of 49.67/68. The rupee has fallen drastically for the third consecutive day as the Asian markets’ currencies have weakened against the dollar due to economic worries and plummeting stock markets.

On BSE, total number of shares traded were 22.61 Crore and total turnover stood at Rs 2,883.85 Crore. On NSE, total number of shares traded were 51.02 Crore and total turnover was Rs 7,742.77 Crore.

Top traded volumes on NSE Nifty – Unitech with 47718080 shares, DLF with 21886033 shares, Suzlon with 15771497 shares, ICICI Bank with total volume traded 13254008 shares followed by Reliance Petro with 12688599 shares.

On NSE Future and Options, total number of contracts traded in index futures was 898947 with a total turnover of Rs 11,596.63 Crore. Along with this total number of contracts traded in stock futures were 1005124 with a total turnover of Rs 10,646.87 Crore. Total numbers of contracts for index options were 1261885 with a total turnover of Rs 17,769.45 Crore and total numbers of contracts for stock options were 96294 and notional turnover was Rs 1,081.88 Crore.

Today, Nifty would have a support at 2,724 and resistance at 2,812 and BSE Sensex has support at 8,836 and resistance at 9,075.