Pre Session Commentary - May 18 2009

Today domestic markets are likely to open with huge gap up. The 14th Lok Sabha election results have once again bestowed Congress party with a responsibility of leading the nation for another five years. The 262 seats of Congress and its alliance UPA, has exuded the nation’s belief in the Manmohan Singh’s government. There will be a lot of movement in the Banking and Infrastructure stocks as the government is expected to allocate good amount of money in these sectors in the coming budget. Foreign funds will most likely pour a lot of money in anticipation of a stable government. Hence rupee would gain strength through a major break through of FIIs. The day will witness huge buying sentiments across the broader level.

On Friday, the domestic markets closed in green. Phenomenal opening of the Asian markets along with positive closing of the US markets brought a good feel factor for domestic investors and therefore benchmark indices spurred at opening bell. The bounce back was less anticipated ahead of the Lok Sabha election results to be announced on 16th May 2009. However investors surprised the markets by showing huge buying interest responding positive cues from other markets. Bankex, CG, CD and Teck closed with gains of 3.86%, 3.57%, 3.18% and 3.05% respectively. However FMCG was the only sector to close with a loss of 0.24%. Mid and Small cap stocks also managed to close with moderate gains of 3.86% and 0.57% respectively. We expect the markets to be trading positive.

The BSE Sensex closed high by 300.51 points at 12,173.42 and NSE Nifty ended with gain of 78.20 points at 3,671.65. BSE Mid Caps and Small Caps closed with gains of 50.14 points and 35.45 points at 3,807.07 and 4,279.60 respectively. The BSE Sensex touched intraday high of 12,219.54 and intraday low of 11,948.70.

On Friday, the US stock markets closed negative. For the fourth session in the week the markets closed in red. The session was choppy in the early trade which further instigated selling pressure across broader level. On the macro economic level the consumer price index for the month of April met expectations. However the industrial production fell by 0.5%. The life insurance companies will get an access to $22 billion in TARP funds. This news also raised apprehensions about low grading of these companies and therefore the life and health insurers closed with a loss of 3.5%. The US light crude oil futures for June closed lower by 3.6% at $56.52 per barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) fell by 62.68 points to close at 8,268.64 The NASDAQ Composite (RIXF) index declined by 9.07 points to close at 1,680.14 and the S&P 500 (SPX) closed low by 10.19 points at 882.88.

Today major stock markets in Asia are trading in red. Hang Seng is trading low by 246.18 points at 16,544.52 followed by Shanghai Composite which is low by 33.22 points at 2,612.04. Japan''s Nikkei is also low by 238.22 points at 9,026.80, Strait Times is low by 15.54 points at 2,124.24. Seoul Composite fell by 18.58 points at 1,373.15 respectively.

Indian ADRs ended up. In technology sector, Infosys ended up by 1.72% along with Wipro by 2.99%. Further, Satyam gained 0.56% and Patni Computers ended higher by 5.48%. In banking sector ICICI Bank advanced by 4.93% and HDFC Bank went up by 2.72%. In telecommunication sector Tata Communication decreased by 2.20% and MTNL lost 2.36%. Sterlite Industries increased by 0.88%.

The FIIs on Friday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 1,523.40 Crore and gross debt purchased stood at Rs 255.70 Crore, while the gross equity sold stood at Rs 1,869.10 Crore and gross debt sold stood at Rs. 673.20 Crore. Therefore, the net investment of equity and debt reported were Rs (345.70) Crore and Rs (417.40) Crore respectively.

On Friday, the partially convertible rupee ended at 49.41/42 per dollar, 0.7 percent stronger than previous close at 49.78/79. Rupee gained strength due to phenomenal rise in local stock markets.

On BSE, total number of shares traded were 40.65 Crore and total turnover stood at Rs 5,113.70 Crore. On NSE, total number of shares traded was 83.68 Crore and total turnover was Rs 14,820.51 Crore.

Top traded volumes on NSE Nifty – Unitech with 55560935 shares, Cairn India with 32770419 shares, Suzlon Energy with 32303136 shares, DLF 24067427 shares followed by ICICI Bank with 13335097 shares.

On NSE Future and Options, total number of contracts traded in index futures was 682881 with a total turnover of Rs 12,034.37 Crore. Along with this total number of contracts traded in stock futures were 386175 with a total turnover of Rs 15,583.22 Crore. Total numbers of contracts for index options were 1284823 with a total turnover of Rs 23,723.20 Crore and total numbers of contracts for stock options were 34676 and notional turnover was Rs 1,512.21 Crore.

Today, Nifty would have a support at 3,732 and resistance at 3,795 and BSE Sensex has support at 12,355 and resistance at 12,712.