Pre Session Commentary - Oct 22 2009

Today domestic markets are likely to open negative amid weak start in Asian Market, slide in SGX Nifty and lower US Market overnight. The trade would be choppy with negative bias. One could expect selling pressure in IT, Metals, Realty and Banking sphere in mid-trade. Today domestic market is likely to trade range bound with negative bias.

On Wednesday, Indian market slumped following weak cues from the global market and lower US Index futures. It started on flat note with negative bias tracking unfavorable cues from global markets. Latter, Indices continued to trade choppy, as the investors were hesitant to take any fresh long positions and were looking to exit stocks at current high levels. Stocks tried to improve during early afternoon trade but the recovery was short lived and market again reported fall. During final trading hours, market slipped piercingly due to huge sell off, as investors were worried on negative trading in European markets. Broad based selling was seen in majority of sectors Auto (2.36%), FMCG (2.06%), Bankex (2.00%) and Metal (1.69%). However, Realty (0.26%), Teck (0.04%) and IT (0.03%) stocks were in limelight, as witnessed most of the buying from these baskets. The Market breadth, indicating the overall strength of the market, was weak.

The BSE Sensex lower by 213.84 points or 1.24% at 17,009.19 and NSE Nifty ended down by 50.85 points or 0.99% at 5,063.60. BSE Small Caps closed with gains of 317.52 points at 7,800.39 and BSE Mid Caps closed with losses of 71.49 points at 6,854. The BSE Sensex touched intraday high of 17,248.69 and intraday low of 16,997.86.

On Wednesday, the US stock market closed lower on aggressive selling in the final hour of trade. Financial stocks slipped under a strong fit of selling pressure despite strong earnings from Morgan Stanley and U.S. Bancorp. The downturn was across the board and left many of the major sectors to settle at session lows. Even energy stocks couldn’t hold their gains and closed negative. Energy stocks had been in limelight by strong oil prices, which to $82 per barrel mark following the latest oil inventory data. Stocks and commodities were moderately influence to a weaker dollar on the onset of trade, but the greenback garnered attention as it extended its slide. US light crude oil futures for November delivery closed up 2.9 % at $81.37 per barrel, on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) ended with loss of 92.12 points at 9,949.36. NASDAQ index slipped 12.74 points to 2,150.73 and the S&P 500 (SPX) closed lower by 9.66 points at 1,081.40.

Indian ADRs ended lower yesterday. In the IT pack, Infosys was down 0.56%, Satyam was down 3.88%, Wipro was down 0.84%, while Patni was up 1.67%. In the banking space, ICICI Bank was down 4% and HDFC Bank was down 3.35%. In the telecom space, Tata Comm was down 2.47% and MTNL was down 4.68%. In the other sector, Sterlite was down 0.56%, Dr Reddys was down 2.79% and Tata Motors was down 1.96%.

The FIIs on Wednesday stood as net buyers in equity and debt. Gross equity purchased stood at Rs. 4,478.30 crore and gross debt purchased stood at Rs. 418.00 crore, while the gross equity sold stood at Rs. 2,708.30 crore and gross debt sold stood at Rs. 234.70 crore. Therefore, the net investment of equity and debt reported were Rs. 1,770.00 crore and Rs. 183.30 crore respectively.

On Wednesday, the partially convertible rupee ended at 46.48/49 per dollar, 0.80% weaker than previous closing at 46.11/12 per dollar as market closed weak turned sentiment cautious over the movement of fund flows and some banks bought dollars cheaper to arbitrage offshore. Importers also bought dollars.

On BSE, total number of shares traded were 44.06 crore and total turnover stood at Rs. 6,008.74 crore. On NSE, total number of shares traded were 85.67 crore and total turnover was Rs. 18,009.67 crore.

Top traded volumes on NSE Nifty – Unitech with total volume traded 53437276 shares, followed by Jaiprakash Associates with 19685318, Bharti Airtel with 16648993, DLF with 16574634 and Suzlon Energy with 15638588 shares.

On NSE Future and Options, total number of contracts traded in index futures was 527822 with a total turnover of Rs. 13,162.35 crore. Along with this total number of contracts traded in stock futures were 709032 with a total turnover of Rs. 24,927.87 crore. Total numbers of contracts for index options were 1077863 with a total turnover of Rs. 27,446.15 crore and total numbers of contracts for stock options were 68703 and notional turnover was Rs. 2,400.63 crore.

Today, Nifty would have a support at 5,034 and resistance at 5,092 and BSE Sensex has support at 17,005 and resistance at 17,178.