Pre Session Commentary - March 19 2009

Today domestic markets are likely to open positive as US markets have once again closed with phenomenal gains on the back of latest policy statement of the FOMC. IBM in talks to buy Sun Microsystems has been wild fire news across the world. The FOMC has kept its fed rate unchanged at 0 - 0.25% and further it is buying treasuries to a tune of $300 billion to keep its balance sheet heavy. This will probably influence the yield of the bonds as well. The other Asian markets are also trading in the northward direction showing signs of positive sentiments. On the domestic front one could once again witness some trend happening across broader level along with the profit booking pressures.

On Wednesday, the domestic markets opened with phenomenal positive gap and managed to sustain the gain till the end. The strong positive cues from the US, Asian and Other European markets helped the domestic investors gain momentum. The day’s trade witnessed blistering buying interest across broader level, however towards the end the frontline stocks pared off some gains due to profit booking pressure. FMCG was the only laggard in the rally whereas sectors like Realty, Metal, CG and Bankex gained by 7.65%, 3.47%, 3.18% and 2.63% respectively. During the session we expect the markets to be trading positive with mild volatility.

The BSE Sensex closed high by 112.86 points at 8,976.68 and NSE Nifty ended high by 37.25 points at 2,794.70. BSE Mid Caps and Small Caps ended with gains of 63.55 points and 54.17 points at 2,759.90 and 3,064.48 respectively. The BSE Sensex touched intraday high of 9,120.46 and intraday low of 8,951.32.

On Wednesday, the US stock markets closed with phenomenal gains. IBM in talks to buy Sun Microsystems has been wild fire news across the world which shows consolidation in the IT sphere. On the other hand the FOMC is maintaining a target fed funds lending rate within the range 0.00% to 0.25%, as predicted. Further it will bolster its balance sheet by buying up to $300 billion of Treasuries during the next six months. The 10-year Note surged on the news; it finished almost 4 points higher, pushing its yield down to a two-month low of 2.55%. Besides, an additional $100 billion of agency debt will also be purchased this year, bringing the total to $200 billion. The Consumer Price Index for February showed a 0.4% month-over-month increase, which topped the 0.3% increase that was expected. Core CPI for February increased 0.2% month-over-month, which also exceeded the consensus 0.1% increase. US light crude oil for April delivery fell by $0.98 to settle at $48.16 a barrel on the New York Mercantile Exchange. Crude Oil prices managed to recover from the lows of $46.92 per barrel after the Department of Energy reported a larger-than-expected weekly inventory build.

The Dow Jones Industrial Average (DJIA) closed up by 90.88 points at 7,486.58, the NASDAQ Composite (RIXF) index gained 29.11 points to close at 1,491.22 and the S&P 500 (SPX) inclined by 16.27 points to close at 794.22.

Today major stock markets in Asia are trading positive. Shanghai composite is up by 21.75 points at 2,245.48 followed by Hang Seng that is also up by 25.92 points at 13,143.09. Further, South Korea''s Seoul Composite is flat at 1,171.72 and Japan''s Nikkei is also flat at 7,967.09. However, Singapore''s Strait Times is up by 18 points at 1,593.94.

Indian ADRs ended up. In technology sector, Patni Computers ended higher by 4.05% along with Infosys by 3.31%. Further, Wipro gained 5.05 and Satyam closed up by 5.06%. In banking sector ICICI Bank and HDFC Bank gained 6.19% and 4.77 respectively. In telecommunication sector, Tata Communication advanced by 5.21% along with MTNL by 1.96%. Further, Sterlite Industries increased by 4.11%.

On Wednesday, the Indian rupee closed at 51.29/30, 0.35% stronger than its previous close of 51.47/48. On the back of phenomenal trend in the stock markets the rupee gained strength.

On BSE, total number of shares traded were 34.02 Crore and total turnover stood at Rs 3,974.95 Crore. On NSE, total number of shares traded were 70.57 Crore and total turnover was Rs 10,903.28 Crore.

Top traded volumes on NSE Nifty – Suzlon with 43254377, Unitech with 34988893 shares, DLF with 21474898 shares, ICICI Bank with 16522390 shares followed by SAIL with 12662153 shares.

On NSE Future and Options, total number of contracts traded in index futures was 988339 with a total turnover of Rs 13,239.72 Crore. Along with this total number of contracts traded in stock futures were 524671 with a total turnover of Rs 15,116.50 Crore. Total numbers of contracts for index options were 1768930 with a total turnover of Rs 24,886.21 Crore and total numbers of contracts for stock options were 52560 and notional turnover was Rs 1,629.22 Crore.

Today, Nifty would have a support at 2,779 and resistance at 2,839 and BSE Sensex has support at 8,942 and resistance at 9,155.