Pre Session Commentary - Oct 14 2009

Today domestic markets are likely to open positive as Asian markets are trading positive with strong gains. However, mixed trade in US market may pull the market down that will be followed by a range bound volatile session. On could expect a rebound in the latter trading hour that would also bring some profit booking pressure as well. Today domestic markets are likely to trade range bound with positive bias.

On Monday, domestic market closed spectacularly higher after intraday volatility. Tracking the firm European markets, higher US Index Futures, better than expected Industrial output data and some amount of optimism coming from Reliance business house uplifted the bourses. A strong response to IPO of Indiabulls power which was oversubscribed within half an hour of opening of the issue also lifted sentiments. Prime Minister''s Manmohan Singh statement on 11 Oct’09 that the economic stimulus will continue, aided the rally. Net-net it was a phenomenal day for the market. From the sectoral front, investors’ on-loaded position across the sectors. Consumer Durable, IT, Bank, Oil & Gas, Teck, FMCG, Metal and Realty stocks contributed to trade higher by 3.72%, 2.94%, 2.63%, 2.35%, 2.45%, 2.25%, 2.04% and 1.48% respectively.

The BSE Sensex closed higher by 384.01 points or 2.31% at 17,026.67 and NSE Nifty ended up by 109.05 points or 2.21% at 5,054.25. BSE Mid Caps and Small Caps closed with gains 77.08 and 77.55 points at 6,378.46 and 7,449.34 respectively. The BSE Sensex touched intraday high of 17,068.78 and intraday low of 16,678.32.

On Tuesday, the US stock market closed lower after its six-session of consecutive gains. Despite better-than-expected data from pharmaceutical giant Johnson & Johnson (JNJ) and wakening dollar, the market could not hold positive. The dollar neared to 52-weeks lows early this session, however investors were eyeing on third quarter numbers from JNJ which reported earnings of $1.20 per share and disclosed an increased earnings outlook of $4.54 to $4.59 per share for fiscal 2009. News that shares of Goldman Sachs were downgraded by Meredith Whitney Advisors, added some amount of nervousness. Materials and Telecom stocks showed some strength after recovering from morning lows.
Gold prices spurted to new record highs of $1,069.70 per ounce in morning trade, but saw some of those gains pared off before settling with a 0.7% gain at $1,064.60 per ounce. Materials, Consumer Durables and Telecom were the leaders of the day with respective gains of 0.5%, 0.4% and 0.4% respectively. However, Financials, Health Care, Utilities and Consumer Staples were the losers with losses of 1.1%, 1.0%, 0.6% and 0.2% respectively among others. US light crude oil futures for November delivery closed 1.2% higher at $74.15 per barrel, on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) ended with loss of 14.74 points at 9,871.06. NASDAQ index climbed 0.75 points to 2,139.89 and the S&P 500 (SPX) closed lower by 3.00 points at 1,073.

Indian ADRs ended mixed on Tuesday. In the IT space, Wipro was down 0.44% and Patni Computers was down 0.27% while Infosys was up 0.93% and Satyam Computers was unchanged at $ 6.26. In the telecom space, MTNL was up 0.28% and Tata Communication was up 1.73%. In the banking space, HDFC Bank was up 0.27% and ICICI Bank was up 0.36%. In other sectors, Tata Motors was down 1.64%, Sterlite Industries was down 0.69% while Dr Reddy''s Labs was up 0.14%.

The FIIs on Monday stood as net buyers in equity and debt. Gross equity purchased stood at Rs. 3,282.50 crore and gross debt purchased stood at Rs. 511.80 crore, while the gross equity sold stood at Rs. 3,031.80 crore and gross debt sold stood at Rs. 277.90 crore. Therefore, the net investment of equity and debt reported were Rs. 250.70 crore and Rs. 233.90 crore respectively.

On Monday, the partially convertible rupee ended at 46.48/49 per dollar, 0.2% weaker than previous closing at 46.40/42 per dollar. Better-than-expected industrial data added to signs the rebound in economy and the stock market’s single biggest gain in seven weeks offset the impact of broad-based dollar strength. The rally in rupee was paused as banks bought dollars noting its fall versus major units.

On BSE, total number of shares traded were 40.46 crore and total turnover stood at Rs. 5,284.64 crore. On NSE, total number of shares traded were 71.40 crore and total turnover was Rs 15,765.64 crore.

Top traded volumes on NSE Nifty – Unitech with total volume traded 38476354 shares, followed by Bharti Airtel with 14215161, Reliance Communication with 13903094, Suzlon Energy with 13023053, Idea Cellular with 7665984 and Hindalco with 7461726 shares.

On NSE Future and Options, total number of contracts traded in index futures was 732803 with a total turnover of Rs. 17,425.96 crore. Along with this total number of contracts traded in stock futures were 539313 with a total turnover of Rs. 17,983.83 crore. Total numbers of contracts for index options were 1374503 with a total turnover of Rs. 34,572.43 crore and total numbers of contracts for stock options were 62004 and total turnover was Rs 2,023.62 crore.

Today, Nifty would have a support at 4,918 and resistance at 5,010 and BSE Sensex has support at 16,780 and resistance at 16,990.