Pre Session Commentary - Feb 3 2009

Today domestic markets are likely to open positive. The markets may rebound in today’s trade as other Asian markets have also opened with remarkable gains. The only news that is spreading a feel good factor across Asia is the Australian Government proposing $25 billion stimulus package. This second stimulus package is aimed to support 90,000 jobs besides boosting the economic growth. On the domestic macro economic front, Merchandise exports shrunk 1% in December, 2008 and stood at $12.7 billion, compared to $12.82 billion in the same month last year. Imports during the month increased by 9% to $20.25 billion from $18.61 billion in the year ago month. Trade deficit in December stood at $7.5 billion, a rise of 31.5% compared to $5.7 billion in December 2007. We anticipate a positive trend in today’s session.

On Monday, the markets opened with a negative gap and further deteriorated to close with huge loss. Huge selling was witnessed since the opening session as there was panic prevailing in the other Asian markets as well. On the macro economic scenario the traded deficit of $7.5 billion also added fuel to the negative sentiments of the markets. The front line stocks were thrashed badly as they pared off their gains on Friday. Amongst the frontline stocks, Jaiprakash Associate, DLF and Reliance Infra were the top losers as they lost 13.70%, 13.54% and 10.50% respectively. The grim was witnessed across all the sectors however sectors like Realty, Metal and Bankex suffered severe injuries as they lost 10.32%, 5.34% and 5.11% respectively. Mid caps and Small caps also felt the burn as they lost 1.55% and 1.53% respectively. During the session we expect the markets to be trading positive.

The BSE Sensex closed low by 357.54 points at 9,066.70 and NSE Nifty ended with losses of 108.15 points at 2,766.65. The BSE Mid Caps and Small Caps ended with losses of 45.56 points and 51.10 points at 2,895.91 and 3,287.95 respectively. The BSE Sensex touched intraday high of 9,363.58 and intraday low of 9,048.97.

The US markets on Monday closed mixed. The lack of news in the markets left investors to trade with little sentiments to lead a direction and hence markets closed mixed. The financial stocks managed to close with a gain of 0.2% after a volatile market trade. The investors are still waiting for the ‘Bad Bank’ plan of the government. On other macro economic news construction spending in December fell 1.4% worse than the expected 1.2% decline. The drop in December indicates an accelerated decline from the 1.2% decline registered in the prior month. Further personal spending for December was down 1% while personal income decreased by 02%. Crude oil futures for the month of Mach delivery fell by $1.60 to $40.08 per barrel on New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed lower by 64.11 points at 7,936.75 NASDAQ index gained 18.01 points at 1,494.43 and the S&P 500 (SPX) tumbled 0.45 points at 825.43.

Indian ADRs ended mixed. In technology sector, Satyam ended up by 5.79% along with Patni Computers by 0.90%. Further, Infosys ended with increase of 0.23% while Wipro closed lower by 1.44%. In banking sector ICICI Bank lost 2.55% andHDFC Bank dropped by 1.11%. In telecommunication sector, Tata Communication and MTNL slipped 2.83% and 1.03 respectively Sterlite Industries decreased by 2.06%.

Today major stock markets in Asia have opened positive. Shanghai composite is up by 27.64 points to 2,039.24, Japan''s Nikkei is also up by 210.43 points at 8,084.41 along with Hong Kong''s Hang Seng that surged 134.73 points at 12,996.23. South Korea''s Seoul Composite is up by 22.28 points at 1,169.23 and Singapore''s Strait Times is also up by 18.67 points to 1,723.96.

The FIIs on Monday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 1,318.80 Crore and gross debt purchased stood at Rs 49.40 Crore, while the gross equity sold stood at Rs 1,335.40 Crore and gross debt sold stood at Rs 335 Crore. Therefore, the net investment of equity and debt reported were Rs (16.60) Crore and Rs (285.60) Crore respectively.

On Monday, the Indian rupee ended at 48.92/93 per dollar, 0.05 paise weaker than Friday’s close of 48.87/88. The rupee slogged due to the drastic fall in stock markets showing concerns of foreign capital outflow.

On BSE, total number of shares traded were 31.66 Crore and total turnover stood at Rs 3,026.12 Crore. On NSE, total number of shares traded were 64.32 Crore and total turnover was Rs 8,446.36 Crore.

Top traded volumes on NSE Nifty – Unitech with 63675896 shares, Suzlon Energy with 25713557 shares, DLF with 22895073 shares, Reliance Comm with total volume traded 9590086 shares followed by Reliance Petro with 8766368 shares.

On NSE Future and Options, total number of contracts traded in index futures was 802375 with a total turnover of Rs 10,302.39 Crore. Along with this total number of contracts traded in stock futures were 905376 with a total turnover of Rs 8,545.57 Crore. Total numbers of contracts for index options were 1002065 with a total turnover of Rs 14,482.79 Crore and total numbers of contracts for stock options were 82639 and notional turnover was Rs 874.51 Crore.

Today, Nifty would have a support at 2,745 and resistance at 2,878 and BSE Sensex has support at 8,985 and resistance at 9,325.