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Wednesday, May 20, 2009

Pre Session Commentary - May 20 2009


Today domestic markets are likely to open positive as the UPA will form a new government today. There are no global cues to guide the domestic markets sentiments and therefore the local news about the cabinet formation of the UPA will play a major role in deciding the market movements. However profit booking at this high level is also indispensable as there were indications in yesterday’s late trading session which turned choppy.

Tuesday, the domestic markets closed flat after a rigorous volatile session. The timid opening caused some selling pressure in the beginning however after the post morning session both the benchmark indices were trading with phenomenal gains. Cautiousness and profit booking pressures pulled the sentiments down and markets pared off its gains to close flat. This trading day once again marked a red letter day by recording a whopping Rs. 1.57 Lakh crores of trading ever in the history of Indian stock markets. Sectors like Realty, Bankex and CG closed with huge gains of 12.80%, 6.84% and 6.33% respectively. On the other hand the bottom line stocks outshined the benchmark indices by clocking remarkable gains of 3.60% and 2.52% respectively. We expect the markets to be trading positive with an essence of volatility.

The BSE Sensex closed high by 17.82 points at 14,302.03 and NSE Nifty ended with marginal loss of 4.70 points at 4,318.45. BSE Mid Caps and Small Caps closed with gains of 153.34 points and 117.40 points at 4,407.82 and 4,784.14 respectively. The BSE Sensex touched intraday high of 14,930.54 and intraday low of 13,834.13.

On Tuesday, the US stock markets closed mixed. The late selling pressure due to bad housing data pushed the markets into choppy session. The financial sector fell by 2.06% as the consumer finance and banking stocks traded weakly. The consumer finance stocks came under huge selling pressure after the news set ablaze the traders that the senate had passed a new legislation to imply restrictions on the credit card industry. American Express showed weakness despite the company announced plans to save $800 million this year by slashing jobs, investments, and costs. On the other hand the new housing starts and building permits fell below expectations as the April housing starts came in an annualized rate of 4,58,000, while the building permits recorded at 4,94,000. The US light crude oil futures for June which expired at this session closed higher by 1.1% at $59.65 per barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) declined by 29.23 points to close at 8,474.85 The NASDAQ Composite (RIXF) index inclined by 2.18 points to close at 1,734.54 and the S&P 500 (SPX) closed low by 1.58 points at 908.13.

Today major stock markets in Asia are trading mixed. Hang Seng is trading low by 64.08 points at 17,479.95 followed by Shanghai Composite which is low by 3.07 points at 2,673.61. Japan''s Nikkei is up by 28.10 points at 9,318.39, Strait Times is flat by 0.03 points at 2,260.33. Seoul Composite rose by 2.35 points at 1,430.56 respectively.

Indian ADRs ended lower. In technology sector, Infosys ended down by 5.39% along with Wipro by 2.87%. Further, Satyam lost 8.47% and Patni Computers ended lower by 8.99%. In banking sector ICICI Bank and HDFC Bank dropped by 0.34% and 4.11% respectively. In telecommunication sector Tata Communication decreased by 2.21% and MTNL lost 5.23%. Sterlite Industries decreased by 3.37%.

The FIIs on Tuesday stood as net buyers in equity and debt. Gross equity purchased stood at Rs 58.10 Crore and gross debt purchased stood at Rs 100.40 Crore, while the gross equity sold stood at Rs 4.70 Crore and gross debt sold stood at Rs. 68.30 Crore. Therefore, the net investment of equity and debt reported were Rs 53.40 Crore and Rs 32.20 Crore respectively.

On Tuesday, the partially convertible rupee ended at 47.75/77 per dollar, 0.3 percent stronger than previous close at 47.88/90. Rupee continued gaining strength touching 47.27 in early trade but central bank’s intervention contained the further gain of the local currency against the green back.

On BSE, total number of shares traded were 90.89 Crore and total turnover stood at Rs 11,781.35 Crore. On NSE, total number of shares traded was 192.26 Crore and total turnover was Rs 40,151.91 Crore.

Top traded volumes on NSE Nifty – Unitech with 155065407 shares, Suzlon Energy with 66090397 shares, DLF 57111448 shares, ICICI Bank with 29985698 shares followed by Reliance Comm with 23255224 shares.

On NSE Future and Options, total number of contracts traded in index futures was 1467599 with a total turnover of Rs 31,082.77 Crore. Along with this total number of contracts traded in stock futures were 641588 with a total turnover of Rs 32,867.31 Crore. Total numbers of contracts for index options were 1941044 with a total turnover of Rs 40,080.98 Crore and total numbers of contracts for stock options were 39830 and notional turnover was Rs 1,954.46 Crore.

Today, Nifty would have a support at 4,359 and resistance at 4,410 and BSE Sensex has support at 14,415 and resistance at 14,789.