Oct 10, 2008

Markets expected to open down and recover during the day

09 Sep 2008 | 10:00
Markets expected to open down and recover during the day

The markets closed with big gains on Monday on the back of the NSG approval received over the weekend and the bailout of Freddie Mac and Fannie Mae by the US government. The BSE Sensex ended the session with 3.2% gains over Friday at 14,955. After a gap up opening & making an intra-day high of 4,558, the Nifty consolidated at those levels through the day. However, during the last hour of trade, it witnessed some profit taking, but still closed on a strong note at 4,482.3, up by 3% over Friday’s close. The NSE cash turnover stood at Rs. 11,695 crores in comparison to Rs. 11,407 crores on Friday. The market breadth was positive on BSE with the advance-decline ratio of 3:2. Among the sectoral indices, the Consumer Durables index was the only loser, which fell by 0.3%. The rest of the indices ended in the green with Banks, Capital Goods & Power indices being the major gainers, increasing by 4.1%, 3.7% & 3.4% respectively.

U.S. stocks rose on Monday as investors bet Washington's bailout of mortgage finance giants Fannie Mae and Freddie Mac would stabilize the U.S.
housing sector and calm jittery world financial markets. The US markets closed with the Dow Jones and Nasdaq increasing by 2.6% and 0.6% respectively. Most of the Indian ADRs closed higher on Monday. While Infosys and Wipro closed higher by 0.2% and 3.2%, Satyam closed down 0.6%.
ICICI & HDFC Bank increased by 1.2% & 4.1% respectively. MTNL and TCL were up by 0.5% and 5.9% each respectively.

Among the Latin American markets, the Mexican markets increased by 1.3%, while Brazilian markets increased by 1%. Among the Metal prices, Copper and Zinc decreased by 1% & 0.3% respectively, while Aluminum & Nickel increased by 0.2% & 0.4% respectively. The light crude oil for October increased by 0.11% to settle at $106.34 a barrel. Today, the Asian Markets are trading on a weak note with Nikkei & Hang Seng trading down by 1.5% & 2.3% respectively, while Singapore Strait and Shanghai are trading down by 1.8% and 0.9% respectively.

On Friday, the FIIs were net sellers of Rs. 1,737 crores in the cash markets, while Mutual Funds were net sellers of Rs. 99 crores. As per the provisional figures, FIIs were net buyers of Rs. 253.43 crores in the cash market on Monday, while they were net buyers of Rs. 1,527 crores in the F&O markets.

Today, we expect the Markets to open down in line with other Asian markets and later try to recover from lower levels. Banks, Capital Goods and Oil & Gas could see buying at lower levels.