Pre Session Commentary - June 4 2009

Today domestic markets are likely to open negative and subdued on the back of negative cues from US and other Asian markets. After yesterday’s lackluster trade one could guess the phase of consolidation happening across global markets. There is hardly any specific news to drive and guide the market sentiments. Traders would once again trade with a load of cautiousness, thus keeping the benchmark indices at a range bound level. However stock specific buying would continue along with pick in Mid cap and small cap basket.

On Wednesday, the domestic markets closed flat after a volatile trading session. After a phenomenal gap up opening, the domestic markets started traded firm till the mid of the trading session. However, as the Asian and European markets stated trading with losses the negative sentiments pulled the frontline stocks at domestic level. Towards the end, late buying helped benchmark indices to close flat. Sectors like FMCG, CD, HC and Metal inclined by 4.19%, 4.04%, 2.28% and 1.79% respectively. On the other hand, Mid cap and Small cap stocks were the out performers for the day with gains of 1.50% and 2.11% respectively. We expect the markets to be trading range bound.

The BSE Sensex closed flat at 14,870.90 and NSE Nifty ended flat at 4,530.70. BSE Mid Caps and Small Caps closed with gains of 78.86 points and 131.94 points at 5,325.54 and 6,384.92 respectively. The BSE Sensex touched intraday high of 15,046.43 and intraday low of 14,733.59.

On Wednesday, the US Markets closed negative. After continuous positive trend the US markets paused to close nearly flat after a broad based selling. Some of the economic data like ISM and ADP employment report were less with surprise and inline with expectations. The ISM Services Index for the month of May recorded at 44.0, and was in-line with expectations, while factory orders for April increased 0.7%, below the forecasted figure of 0.9% increase. Nonfarm payrolls report from the ADP Employment Report showed 532,000 job losses for May which was also inline with the consensus forecast. The layoffs seem to have slowed however apprehensions about the consumer spending are still unavoidable. There are expectations that the consumer spending is likely to improve as the Fed Chairman Bernanke stated during his testimony before the House Budget Committee that the overall economic activity is likely to rebound during the second half of this year. The US light crude oil for July delivery declined by 3.6% to settle at $66.05 per barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed low by 65.63 points at 8,675.24, the NASDAQ Composite (RIXF) index declined by 10.88 points to close at 1,825.92 and the S&P 500 (SPX) fell 12.98 points to close at 931.76.

Indian ADRs drag on Wednesday barring a couple of stocks. In Banking space, ICICI Bank was down 5.6% and HDFC Bank was down. In IT space, Patni Computers was down 8.77%, Infosys was down 2.38%, Wipro was down 2.48% while Satyam Computers ended higher 22.91%. In Telecom space, Tata Communication was up 0.26% and MTNL was up 5.47%. In other sectors, Sterlite Industries was down 2.29%, Tata Motors was down 0.29% at and Dr Reddy''s Labs was down 0.08%.

Today major stock markets in Asia are trading negative. Hang Seng is low by 263.01 points at 18,313.46. Shanghai Composite is low by 38.71 points at 2,739.88. Japan''s Nikkei is also trading low by 39.62 points at 9,702.05. Strait Times is also low by 11.62 points at 2,372.20. KLSE Composite is low by 8.22 points at 1,055.40.

The FIIs on Wednesday stood as net buyers in equity and debt. Gross equity purchased stood at Rs 4,067.60 Crore and gross debt purchased stood at Rs 2119.70 Crore, while the gross equity sold stood at Rs 3,858.30 Crore and gross debt sold stood at Rs. 353.60 Crore. Therefore, the net investment of equity and debt reported were Rs 209.30 Crore and Rs 1,766.10 Crore respectively.

On Wednesday, the partially convertible rupee closed at 47.07/08 per dollar, 0.1% weaker than it previous close at 47.02/03. The rupee fell due to lackluster trading in local stock markets.

On BSE, total number of shares traded were 87.46 Crore and total turnover stood at Rs 9,461.31 Crore. On NSE, total number of shares traded was 169.85 Crore and total turnover was Rs 26,272.58 Crore.

Top traded volumes on NSE Nifty – Unitech with 102114423 shares, Suzlon Energy with 89377325 shares, Reliance with 16224312 shares, Hindalco with 15918768 shares, followed by Tata Steel with 15299244 shares.

On NSE Future and Options, total number of contracts traded in index futures was 632256 with a total turnover of Rs 13,633.73 Crore. Along with this total number of contracts traded in stock futures were 4912.36 with a total turnover of Rs 28,913.44 Crore. Total numbers of contracts for index options were 881202 with a total turnover of Rs 20,381.26 Crore and total numbers of contracts for stock options were 38252 and notional turnover was Rs 2,237.04 Crore.

Today, Nifty would have a support at 4,465 and resistance at 4,569 and BSE Sensex has support at 14,765 and resistance at 15,085.