Pre Session Commentary - May 11 2009

Today domestic markets are likely to have positive opening tracking the firm closing of the US markets last week after the government released the results of the stress test. The number of job losses slowed in April, which indicates the deceleration of the pace economic contraction and this gives a boost to the sentiments of the investors. of the as the US bank’s stress test results have jolted the markets in Asia. The stress test for 19 US banks are over and 10 such banks would run for more capital. On the domestic front, State bank of India, India’s largest bank, posted handsome growth in the quarter ended March 2009, which will further enhance the investors confidence. The Bank has posted a net profit of Rs 27423.10 million for the quarter ended March 31, 2009 as compared to Rs 18832.50 million for the quarter ended March 31, 2008. Total Income has increased from Rs 163939.30 million for the quarter ended March 31, 2008 to Rs 220606.10 million for the quarter ended March 31, 2009.

On Friday, domestic markets closed in red as the profit booking took a lead. The Indian market gave up around 2% as intense selling pressure was witnessed in key indices. Rise in inflation to 0.70% for the week ended 25th April 25009, as against 0.57% the week before also depreciated the sentiments. The market opened on flat note tracking mixed cues from the global markets and soon turned volatile We expect the markets to be trading volatile. Finally, market closed with losses with BSE Sensex ended below 11,900 level and NSE Nifty closed lower than 3,650 mark. From sectoral indices, investors off-loaded positions across the sectors barring Consumer Durable index. Besides, Bank Metal, IT, Teck, Power, Realty, and Pharma stocks contributed to most of the selling pressure. We expect the market to remain volatile during the trading session.

The BSE Sensex closed low by 240.51 points at 11,876.43 and NSE Nifty ended with loss of 63.20 points at 3,620.70. BSE Mid Caps closed with a loss of 6.52 points at 3,770.42 and Small Caps closed with a gain of 13.66 points at 4,277.26. The BSE Sensex touched intraday high of 12,180.07 and intraday low of 11,765.06.

On Friday, the US stock markets closed in green tracing the US government released the results of its stress test due to which the major indices closed with strong gains. Also, the slowdown of the job losses in April also gave the confidence to the investors. The financilas stocks rallied as the US government instructed the 10 financial institutions to raise more capital by June 8. During the trading session, eight of the ten sectors reported gains. The energy sector reported strong rally, grew 4.2%, after the crude prices rose 3.1% to $58.47. Moreover, the defensive sectors underperformed, with telecom (-0.4%) falling into the red. US light crude oil futures for June inclined by 0.5% at $58.57 per barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed up by 164.8 points at 8,574.65 The NASDAQ Composite (RIXF) index inched up by 22.76 points to close at 1,739 and the S&P 500 (SPX) grew by 21.84 points to close at 929.23.

Today major stock markets in Asia are trading mixed. Hang Seng is trading higher by 108.95 points at 17,798.82 along with Shanghai Composite, which is up by 22.66 points at 2,648.30. However, Japan''s Nikkei which is down by 68.27 points at 9,364.56, Strait Times is low by 23.75 points at 2214.46. Seoul Composite is marginally down by 1.07 points at 1,411.06 respectively.

Indian ADRs ended higher. In technology sector, Infosys ended up by 0.55% along with Wipro by 1.86%. Further, Patni Computers gained 3.68% and Satyam remained unchanged. In banking sector ICICI Bank gained 4.96% and HDFC Bank advanced by 3.43%. In telecommunication sector Tata Communication dropped by 0.65% while MTNL increased by 5.05%. Sterlite Industries increased by 3.20%.

The FIIs on Friday stood as net buyers in equity and debt. Gross equity purchased stood at Rs 1,898.80 Crore and gross debt purchased stood at Rs 1993.30 Crore, while the gross equity sold stood at Rs 1,503.60 Crore and gross debt sold stood at Rs. 419.70 Crore. Therefore, the net investment of equity and debt reported were Rs 395.20 Crore and Rs 1,573.60 Crore respectively.

On Friday, the partially convertible rupee ended at 49.285/295 per dollar, unchanged as compared to previous close at 49.28/29. Rupee closed flat after a volatile session due to fall in the local stock markets.

On BSE, total number of shares traded were 51.58 Crore and total turnover stood at Rs 6,596.56 Crore. On NSE, total number of shares traded was 106.54 Crore and total turnover was Rs 15,764.22 Crore.

Top traded volumes on NSE Nifty – Unitech with total volume traded 43697018 shares, followed by Suzlon Energy with 39407723 shares, SAIL with 18685122 shares, Tata Steel with 18226785 shares and DLF with 17233889 shares respectively.

On NSE Future and Options, total number of contracts traded in index futures was 947327 with a total turnover of Rs 16,404.99 Crore. Along with this total number of contracts traded in stock futures were 449384 with a total turnover of Rs 18,740.21 Crore. Total numbers of contracts for index options were 1039106 with a total turnover of Rs 19,538.32 Crore and total numbers of contracts for stock options were 34331 and notional turnover was Rs 1,552.85 Crore.

Today, Nifty would have a support at 3,561 and resistance at 3,692 and BSE Sensex has support at 11,634 and resistance at 12,119.