Pre Session Commentary - May 25 2009

Today domestic markets are likely to open negative as there are mixed cues from the other Asian markets. In the domestic arena the swearing of the cabinet of the UPA government has been over. The cues of stable government could give an incentive for the domestic traders to retain their confidence at this level. However amidst lack of support from other markets there could be volatility creeping in during the day’s trade and a subdued opening could hamper the further movement.

On Friday, the domestic markets closed in green. After a subdued opening amidst weak global cues the domestic benchmark indices started drifting towards southward. However as the European markets bounced back after yesterday’s losses, domestic sentiments started building its way towards the northward. Heavyweights like ICICI Bank and Reliance Industries took the lead to guide rest of the benchmark indices stocks. Further public sector stocks like NMDC and IFCI gained momentum on government’s disinvestment policy. Besides Oil marketing companies also inclined on the back of news of fuel free pricing policy. CG, Bankex, and HC were the gainers of the day with respective gains of 2.90%, 1.80% and 1.77%. Small cap stocks snatched the charm of the day for the second day consecutive day recording a phenomenal gain of 3.19%. We expect the markets to be trading volatile.

The BSE Sensex closed high by 150.61 points at 13,887.15 and NSE Nifty ended with gain of 27.60 points at 4,238.50. BSE Mid Caps and Small Caps closed with phenomenal gains of 81.81 points and 170.63 points at 4,755.68 and 5,513.16 respectively. The BSE Sensex touched intraday high of 13,936.93 and intraday low of 13,611.30.

On Friday, the US stock markets closed in red. There was lack of any news from the corporate or macro economic data which left the traders cautious. Financial stocks were the laggard of the day as they finished the session with a loss of 1.2%. Banks were the primary laggard in the financial sector, diversified banks and regional banks closed with losses of 2.6% and 1.8% respectively. FDIC has further indicated that though the stress tests for banks are over, a further assessment is probable. The FDIC also expects a total loss of $70 billion in the deposit insurance fund over the next five years. The Automakers were under pressure as they tumbled by 2.9% on the back of news that the bond holders refused to take equity stake in General Motors. The company has further received much need support from the United Auto workers union and consequently the company is less likely to be declared bankrupt next week. US light crude oil futures for July closed higher by 0.8% at $61.63 per barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) declined by 14.81 points to close at 8,277.32. The NASDAQ Composite (RIXF) index fell by 3.24 points to close at 1,692.10 and the S&P 500 (SPX) closed low by 1.33 points at 887.00.

Today major stock markets in Asia are trading mixed. Hang Seng is trading low by 98.13 points at 16,964.39 followed by Shanghai Composite which is low by 31.88 points at 2,565.72. Japan''s Nikkei is up by 51.33 points at 9,277.64, Strait Times is up by 2.25 points at 2,247.52. Seoul Composite is low by 35.57 points at 1,368.18 respectively.

Indian ADRs ended up. In technology sector, Infosys ended higher by 0.22% along with Wipro by 0.83%. Further, Satyam gained 12.50% and Patni Computers advanced by 3.00%. In banking sector ICICI Bank and HDFC Bank increased by 5.32% and 2.22% respectively. In telecommunication sector Tata Communication increased by 1.54% whereas MTNL remained unchanged. Sterlite Industries increased by 1.67%.

The FIIs on Friday stood as net buyers in equity and net sellers in debt. Gross equity purchased stood at Rs 3,896.40 Crore and gross debt purchased stood at Rs 76.40 Crore, while the gross equity sold stood at Rs 3,749.50 Crore and gross debt sold stood at Rs. 409.90 Crore. Therefore, the net investment of equity and debt reported were Rs 146.90 Crore and Rs (333.50) Crore respectively.

On Friday, the partially convertible rupee ended at 47.11/12 per dollar, 0.55 percent stronger than previous close at 47.37/38. Rupee gained strength for the Sixth consecutive day as domestic banks sold dollars on fears of further drifting down due to weakness of dollar across the globe as against other currencies.

On BSE, total number of shares traded were 73.29 Crore and total turnover stood at Rs 7,130.73 Crore. On NSE, total number of shares traded was 130.96 Crore and total turnover was Rs 20,333.46 Crore.

Top traded volumes on NSE Nifty – Unitech with 55572956 shares, Suzlon Energy with 32360482 shares, DLF with 20626714, ICICI Bank with 15076899 shares followed by Idea Cellular with 12540693 shares.

On NSE Future and Options, total number of contracts traded in index futures was 813106 with a total turnover of Rs 16,751.84 Crore. Along with this total number of contracts traded in stock futures were 543166 with a total turnover of Rs 27,613.79 Crore. Total numbers of contracts for index options were 1044561 with a total turnover of Rs 22,224.77 Crore and total numbers of contracts for stock options were 29734 and notional turnover was Rs 1,562.20 Crore.

Today, Nifty would have a support at 4,176 and resistance at 4,286 and BSE Sensex has support at 13,685 and resistance at 13,990.