Pre Session Commentary - June 12 2009

Today domestic markets are likely to open positive as most of the Asian markets have opened positive and the US markets have shown better than expected retail sales data. The northward movement of frontline stocks would however test the profit booking pressure. The mid cap and small cap stocks seem to have lost its shine and therefore much movement in that space is less likely. Sesa Goa will be in the limelight today as the company is acquiring a major stake in Dempo for Rs.1,750 crore. The further movement of the markets would depend on the opening of European markets.

On Thursday, the domestic markets closed nearly flat with minimal loss. After a subdued opening the domestic bench mark indices drifted towards the southward on cues of gyrating Asian markets. The sentiments were weak since the opening bell, however throughout day the domestic markets traded range bound. The frontline stocks pared off some gains at this high level and in the stock specific move, Satyam (+10% to Rs80.85) closed with a buying freeze for the third consecutive day. During the last hour of the trade, the markets managed to pare off its early losses to close flat. The inflation numbers fell to three decades low at 0.13% and its has been learned that Finance Minister Pranab Mukherjee has asked banks to reduce interest rates to lend more for the growth in country’s economic activity. We expect the markets to be trading volatile.

The BSE Sensex closed with a loss of 55.34 points at 15,411.47 and NSE Nifty ended with a marginal loss of 17.55 points at 4,637.70. BSE Mid Caps and Small Caps closed with losses of 11.92 points and 55.98 points at 5,347.58 and 6,150.44 respectively. The BSE Sensex touched intraday high of 15,568.74 and intraday low of 15,240.73.

On Thursday, the US Markets closed with moderate gains on the back of better than expected macro economic indicators. Retail sales data recorded a growth of 0.5%, the best in the first three months. Initial weekly jobless claims are declining at a phenomenal pace but the unemployment claims climbed to a record high. Utilities stocks were the charm of the day as it gained a remarkable 2.0% followed by impressive gains among energy stocks, which finished 1.8% higher. The recent surge in crude oil prices has pushed energy stocks to new high and thanks to the good oil demand forecast by IEA for 2009. The US light crude oil for July delivery closed high by 1.81% at $72.60 per barrel marking a new 2009 high on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed high by 31.90 points at 8,770.92 the NASDAQ Composite (RIXF) index inclined by 9.29 points to close at 1,862.37 and the S&P 500 (SPX) closed high by 5.74 points at 944.89.

Today major stock markets in Asia are trading positive. Hang Seng is up by 186.17 points at 18,977.20. Shanghai Composite is low by 16.34 points at 2,780.886. Japan''s Nikkei is trading up by 90.71 points at 10,072.04. Strait Times is also low by 9.87 points at 2,371.94. KLSE Composite is up by 5.99 at 1,088.

The FIIs on Thursday stood as net buyers in equity and no trade in debt. The Gross equity purchased stood at Rs 3,851.50 Crore and gross debt purchased stood at Rs 0.00 Crore, while the gross equity sold stood at Rs 3,133.80 Crore and gross debt sold stood at Rs 0.00 Crore. Therefore, the net investment of equity and debt reported were Rs 717.60 Crore and Rs 0.00 Crore respectively.

On Thursday, the partially convertible rupee closed at 47.60/61 per dollar, 0.80% weaker than it previous close at 47.24/25. The rupee fell due to lackluster trading in local stock markets.

On BSE, total number of shares traded were 55.54 Crore and total turnover stood at Rs 7,618.57 Crore. On NSE, total number of shares traded was 126.29 Crore and total turnover was Rs 23,892.48 Crore.

Top traded volumes on NSE Nifty – Unitech with 88512670 shares, Suzlon Energy with 61687941 shares, Idea Cellular with 35040268 shares, Hindalco with 26673066 shares, followed by Reliance Power with 15355920 shares.

On NSE Future and Options, total number of contracts traded in index futures was 620479 with a total turnover of Rs 13,799.74 Crore. Along with this total number of contracts traded in stock futures were 452149 with a total turnover of Rs 27,097.97 Crore. Total numbers of contracts for index options were 869113 with a total turnover of Rs 20,333.09 Crore and total numbers of contracts for stock options were 39153 and notional turnover was Rs 2,233.47 Crore.

Today, Nifty would have a support at 4,541 and resistance at 4,713 and BSE Sensex has support at 15,275 and resistance at 15,605.