Pre Session Commentary - May 13 2009

Today domestic markets are likely to open positive as the Asian markets have opened with phenomenal gains. The narrow trade deficit data of US for the month of March shows some signs of improvement in international trade of US with other nations. Despite the contraction of 2.3% in IIP data for the month of March and also the exports falling by 33% to $10.7 billion, domestic markets rallied by whopping numbers yesterday. The participation of FIIs would play a crucial role in deciding today’s markets as well. There are also news about MFs holding a total cash of Rs. 14,000 crore, just waiting for some correction in the domestic markets. One could witness volatility creeping in as traders may book some profits on yesterday’s huge gains.

On Tuesday, the domestic markets closed with whopping gains. The session started with a subdued trading, however the rumor of BJP likely to come to power on the back of Bahujan Samajwadi Party’s president Chief Minister of U.P. support lifted the markets phenomenally. FIIs also played a crucial role in lifting the markets to northward. FIIs and Pension Funds traded hugely on the frontline stocks. IT and Bankex were the favourite picks for the day as they gained by 5.19% and 4.83% respectively. Bad IIP numbers for the month of March hardly affected the bullish sentiments of domestic as well as international traders. Mid and Small cap indices were little sluggish in their move as compared to the bench mark indices. We expect the markets to be trading positive with an essence of volatility.

The BSE Sensex closed high by 475.04 points at 12,158.03 and NSE Nifty ended with a gain of 126.50 points at 3,681.10. BSE Mid Caps and Small Caps closed with gains of 34.82 points and 55.39 points at 3,746.24 and 4,240.71 respectively. The BSE Sensex touched intraday high of 12,194.63 and intraday low of 11,625.39.

On Tuesday, the US stock markets closed mixed. There was lack of any specific news to drive the markets. The Large cap stocks of technology and financial sectors witnessed some selling pressures. Bank of America witnessed sell off pressures as traders were unimpressed by news that the company is selling a partial stake in China Construction Bank for $7.3 billion to a consortium of buyers. On the macro economic front, U.S. trade deficit widened to $27.6 billion in March, which is the first time in eight months that the deficit widened. However, the increase comes off of February''s $26.1 billion deficit, which was the narrowest deficit since 1999. US light crude oil futures for June closed fractionally higher by 0.6% at $58.85 per barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) gained by 50.34 points to close at 8,469.11 The NASDAQ Composite (RIXF) index declined by 15.32 points to close at 1,715.92 and the S&P 500 (SPX) closed flat at 908.35.

Today major stock markets in Asia are trading positive. Hang Seng is trading up by 112.19 points at 17,265.83 followed by Shanghai Composite which is also up by 12.15 points at 2,630.32. Japan''s Nikkei is up by 36.75 points at 9,335.36, Strait Times is up by 16 points at 2194.13. Seoul Composite is also flat at 1,405.72 respectively.

Indian ADRs ended mostly higher. In technology sector, Infosys ended up by 2.58% along with Wipro by 6.05%. Further, Satyam gained 1.08% whereas Patni Computers lost 1.36%. In banking sector ICICI Bank gained 3.88% while HDFC Bank dropped by 0.27%. In telecommunication sector Tata Communication increased by 3.04% while MTNL lost 0.69%. Sterlite Industries increased by 1.66%.

The FIIs on Tuesday stood as net buyers in equity and debt. Gross equity purchased stood at Rs 1,684.40 Crore and gross debt purchased stood at Rs 618.60 Crore, while the gross equity sold stood at Rs 1,501.90 Crore and gross debt sold stood at Rs. 593.90 Crore. Therefore, the net investment of equity and debt reported were Rs 182.40 Crore and Rs 24.70 Crore respectively.

On Tuesday, the partially convertible rupee ended at 49.30/31 per dollar, 20 paise stronger than previous close at 49.52/54. Rupee gained on the back of phenomenal rise in the domestic stock markets asserting expectations of greenback 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 97.05 Crore and total turnover was Rs 15,554.95 Crore.

Top traded volumes on NSE Nifty – Unitech with 101016841 shares, Suzlon Energy with 54244786 shares, DLF with 17625083 shares, Hindalco with 15771918 shares followed by SAIL with 14943022 shares.

On NSE Future and Options, total number of contracts traded in index futures was 928686 with a total turnover of Rs 15,984.02 Crore. Along with this total number of contracts traded in stock futures were 424997 with a total turnover of Rs 17,721.73 Crore. Total numbers of contracts for index options were 1005381 with a total turnover of Rs 18,597.49 Crore and total numbers of contracts for stock options were 30594 and notional turnover was Rs 1,374.54 Crore.

Today, Nifty would have a support at 3,630 and resistance at 3,735 and BSE Sensex has support at 12,040 and resistance at 12,395.