Pre Session Commentary - June 5 2009

Today domestic markets are likely to open positive as the US markets closed in green on the back of better than expected weekly job claims. The other Asian markets are trading positive thus paving way for another northward movement today. The government’s focus on the key sectors would help the market sentiments for further firmness. One would witness strong buying sentiments across broader level especially in the mid cap and small cap basket. Stock specific movement would also prevail throughout the trading session.

On Thursday, the domestic markets closed with moderate gains. The session started with a subdued opening on the back of weak global cues. However statement from our Honorable President Pratibha Patil in the 15th Lok Sabha about reviving the Indian economy helped built strong sentiments. As per her statement the government would keep a keen focus on infrastructure, exports, SMEs, housing sector and recapitalise public sector banks. The government would further adopt the disinvestment policy to reduce government’s stake in PSUs to 51%. The markets reacted very positively to the statement. Sectors like Realty, CG, HC and Power inclined by 3.29%, 3.23%, 2.60% and 2.30% respectively. On the other hand, Mid cap and Small cap stocks were once again the out performers for the day with remarkable gains of 2.26% and 2.20% respectively. We expect the markets to be trading positive.

The BSE Sensex closed with a gain of 137.78 points at 15,008.68 and NSE Nifty ended up by 41.95 at 4,572.65. BSE Mid Caps and Small Caps closed with gains of 120.54 points and 140.27 points at 5,446.08 and 6,525.19 respectively. The BSE Sensex touched intraday high of 14,599.43 and intraday low of 15,026.03.

On Thursday, the US Markets closed positive. The markets started with phenomenal gains led by financial stocks which closed 4.0% higher as all the banking stocks rallied. The energy and materials stocks rebound from their previous losses to close with moderate gains of 2% and 2.2% respectively. On macro economic scenario, retailers reported unimpressive comparable store sales for May. The sector had lost 3.0% at their session low however later managed to close at a loss of 1.2%. On the other hand, the numbers of initial jobless claims are slowing as initial weekly claims for the week ending May 30 totaled 621,000, in-line with the consensus estimate. Continuing jobless claims cooled off from record highs by coming in at 6.74 million, which is below what was expected. Traders had broader look at the unemployment picture with tomorrow''s nonfarm jobs report, which is due ahead of the opening bell. The US light crude oil for July delivery inclined by 3.7% to settle at $68.70 per barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed high by 74.96 points at 8,750.24, the NASDAQ Composite (RIXF) index inclined by 24.108 points to close at 1,850.02 and the S&P 500 (SPX) gained 10.70 points to close at 942.46.

Indian ADRs rallied on Thursday. In the telecom space, Tata Communication was up 10.08% and MTNL was up 4.15%. In the banking space, ICICI Bank was up 7.19% and HDFC Bank was up 3.06%. In the IT space, Wipro was up 1.48%, Infosys was up 0.94%, Patni Computers was up 2.79% while Satyam Computers was down 15.38%.

Today major stock markets in Asia are trading positive. Hang Seng is flat at 18,498.92. Shanghai Composite is flat at 2,764.83. Japan''s Nikkei is trading up by 76.80 points at 9,745.76. Strait Times is also up by 14.09 points at 2,376.83. KLSE Composite is up by 8.57 points at 1,063.97.

The FIIs on Thursday stood as net sellers in equity and net buyers in debt. Gross equity purchased stood at Rs 3,423.80 Crore and gross debt purchased stood at Rs 428.20 Crore, while the gross equity sold stood at Rs 3,740.00 Crore and gross debt sold stood at Rs. 209.80 Crore. Therefore, the net investment of equity and debt reported were Rs (316.20) Crore and Rs 218.40 Crore respectively.

On Thursday, the partially convertible rupee closed at 47.20/21 per dollar, 0.3% weaker than it previous close at 47.07/08. The rupee fell as investors booked profit on previous rally.

On BSE, total number of shares traded were 80.49 Crore and total turnover stood at Rs 9,175.26 Crore. On NSE, total number of shares traded was 167.06 Crore and total turnover was Rs 26,357.67 Crore.

Top traded volumes on NSE Nifty – Suzlon Energy with 101522634 shares, Unitech with 89022623 shares, Hindalco with 21048781 shares, DLF with 14756408 shares, followed by Reliance Comm with 12108305 shares.

On NSE Future and Options, total number of contracts traded in index futures was 670007 with a total turnover of Rs 14,488.22 Crore. Along with this total number of contracts traded in stock futures were 490752 with a total turnover of Rs 29,650.73 Crore. Total numbers of contracts for index options were 893178 with a total turnover of Rs 205,43.25 Crore and total numbers of contracts for stock options were 36685 and notional turnover was Rs 2,250.60 Crore.

Today, Nifty would have a support at 4,525 and resistance at 4,626 and BSE Sensex has support at 14,912 and resistance at 15,245.