Pre Session Commentary - May 12 2009

Today domestic markets are likely to open negative as the Asian markets are also trading in red. The sentiments are already weak in domestic arena and therefore further deterioration in inevitable if other markets also show bearish trend. The IIP data for the month of March to be announced today is expected to record contraction. The trading would exude a lot of cautiousness amongst traders and most likely the markets would trade in the southward.

On Monday, due to negative cues from the other markets domestic markets closed in deep red. After a phenomenal positive gap opening the domestic markets plunged into deep red in an hour of trading. The markets have started showing some cautiousness ahead of the Lok Sabha election results. There was lack of any supportive news for the market and therefore traders turned bearish till the end. Amongst the sectors Realty, CD, CG and Power were the top losers as they lost 5.19%, 2.59%, 2.48% and 1.88% respectively. Mid and Small cap indices were equally bashed as they lost by 1.56% and 2.15% respectively. We expect the markets to be trading negative.

The BSE Sensex closed low by 193.44 points at 11,682.99 and NSE Nifty ended with a loss of 66.10 points at 3,554.60. BSE Mid Caps and Small Caps closed with losses of 59 points and 91.94 points at 3,711.42 and 4,185.32 respectively. The BSE Sensex touched intraday high of 12,026.60 and intraday low of 11,621.30.

On Monday, the US stock markets closed in red. Due to lack of any economic news and also the profit booking pressures the markets were under the selling pressure for the entire session. The financial sector which had earned 23% gain in the last week shed 6.8% due to huge profit booking pressures. Wells Fargo has announced that it will raise $8.6 billion as regulators had asked the back to raise nearly $13.4 billion after the bank’s stress test. US light crude oil futures for June closed fractionally lower at $58.53 per barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) fell by 155.88 points to close at 8,418.77 The NASDAQ Composite (RIXF) index declined by 7.76 points to close at 1,731.24 and the S&P 500 (SPX) fell by 19.99 points to close at 909.24.

Today major stock markets in Asia are trading mixed. Hang Seng is trading low by 3.15 points at 17,214.74 followed by Japan''s Nikkei which is up by 16.198 points at 9,401.89, Strait Times is up by 27.62 points at 2229.48. Seoul Composite is also flat at 1,400.47 respectively.

Indian ADRs ended in negative. In technology sector, Satyam closed lower by 5.13% along with Wipro by 4.80% and Infosys by 0.35%. In banking sector, HDFC bank and ICICI Bank fell 1.46% and 3.52% respectively. In telecommunication sector Tata Communication and MTNL dropped by 4% and 1.03% respectively.

The FIIs on Monday stood as net buyers in equity and net sellers in debt. Gross equity purchased stood at Rs 3,164.60 Crore and gross debt purchased stood at Rs 405.40 Crore, while the gross equity sold stood at Rs 1,924.00 Crore and gross debt sold stood at Rs. 816.60 Crore. Therefore, the net investment of equity and debt reported were Rs 1,240.60 Crore and Rs (411.20) Crore respectively.

On Monday, the partially convertible rupee ended at 49.52/54 per dollar, 24 paise weaker than previous close at 49.28/29. Rupee lost ground due to fall in domestic stock markets creating apprehensions of foreign money inflow.

On BSE, total number of shares traded were 41.51 Crore and total turnover stood at Rs 4,380.10 Crore. On NSE, total number of shares traded was 90.05 Crore and total turnover was Rs 13,634.28 Crore.

On NSE Future and Options, total number of contracts traded in index futures was 771072 with a total turnover of Rs 13,236.72 Crore. Along with this total number of contracts traded in stock futures were 387563 with a total turnover of Rs 16,118.81 Crore. Total numbers of contracts for index options were 818472 with a total turnover of Rs 15,101.52 Crore and total numbers of contracts for stock options were 30811 and notional turnover was Rs 1,353.42 Crore.

Today, Nifty would have a support at 3,487 and resistance at 3,525 and BSE Sensex has support at 11,385 and resistance at 11610.