Pre Session Commentary - May 27 2009

Today domestic markets are likely to open with a positive gap as majority of Asian markets have opened with phenomenal gains on the back of huge surge witnessed in US markets last night. The better than expected consumer confidence data in US has increased hopes of traders across the world about improving economic condition of US. In the domestic scenario the abrupt surge is likely to bring some profit booking pressures as the F&O expiry will happen tomorrow.

On Tuesday, the domestic markets closed in deep red. After a subdued opening the markets turned volatile to find some cues form other markets. However as the trading progressed, selling pressure emerged on the back of weak cues from the European markets. Rate sensitive sectors like Realty, Bankex and CG plunged by 3.96%, 3.13%, 3.06% and 3.01% respectively. On the other hand IT was the only sector to survive the blaze. Today Mid cap and Small cap stocks also conceded bulk points due to the profit booking pressure as they had gained enough during the previous couple of days trading. We expect the markets to be trading positive.

The BSE Sensex closed low by 323.99 points at 13,589.23 and NSE Nifty ended with a loss of 120.85 points at 4,116.70. BSE Mid Caps and Small Caps closed with losses of 166.06 points and 180.77 points at 4,724.09 and 5,608.66 respectively. The BSE Sensex touched intraday high of 13,991.46 and intraday low of 13,518.79.

On Tuesday, the US Markets closed with huge positive gains due to better than expected consumer confidence data. The sentiments strengthened after the May consumer confidence data was far better than expected at 54.9 as against the prior month data of 40.8. The Retailers also spiked by a remarkable 4.0% as the buying sentiment erupted with expectations of the improving economic condition. On the other hand Auto giant General Motors also gained momentum by climbing 3.8% due to news from Wall Street Journal that the United Auto Workers Union said the government will provide massive additional assistance to GM. Technology sector also advanced by a remarkable 3.3% as the analyst at Morgan Stanley upgraded the stock of tech major Apple. The US light crude oil for June delivery inclined by 1.2% to settle at $62.38 a barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed up by 196.17 points at 8,473.49, the NASDAQ Composite (RIXF) index inclined by 58.42 points to close at 1,750.43 and the S&P 500 (SPX) gained by 23.33 points to close at 910.33.

Today major stock markets in Asia are trading positive. Hang Seng is trading up by 737.37 points at 17,728.93 followed by Shanghai Composite which is up by 21.37 points at 2,609.95. Japan''s Nikkei is up by 180.32 points at 9,491.13, Strait Times is up by 42.40 points at 2,281.19. Seoul Composite is up by 23.96 points at 1,396 respectively.

The FIIs on Tuesday stood as net buyers in equity and debt. Gross equity purchased stood at Rs 5,092.60 Crore and gross debt purchased stood at Rs 223.50 Crore, while the gross equity sold stood at Rs 2,046.50 Crore and gross debt sold stood at Rs. 197.00 Crore. Therefore, the net investment of equity and debt reported were Rs 3,046.20 Crore and Rs 26.60 Crore respectively.

On Tuesday, the partially convertible rupee closed at 47.88/90 per dollar, 1.25% weaker than it previous close at 47.28/30. This was the biggest fall of local currency against the green in three months due to fall in the local stock markets.

On BSE, total number of shares traded were 85.08 Crore and total turnover stood at Rs 6,938.19 Crore. On NSE, total number of shares traded was 135.76 Crore and total turnover was Rs 19,358.86 Crore.

Top traded volumes on NSE Nifty – Unitech with 79845452 shares, Suzlon Energy with 43185625 shares, Hindalco with 14748839 shares, Reliance Comm with 14664713 shares followed by Bharti Airtel with 13575114 shares.

On NSE Future and Options, total number of contracts traded in index futures was 953672 with a total turnover of Rs 19,554.31 Crore. Along with this total number of contracts traded in stock futures were 552399 with a total turnover of Rs 28,286.93 Crore. Total numbers of contracts for index options were 1312880 with a total turnover of Rs 27,759.24 Crore and total numbers of contracts for stock options were 34143 and notional turnover was Rs 1,795.57 Crore.

Today, Nifty would have a support at 4,164 and resistance at 4,220 and BSE Sensex has support at 13,755 and resistance at 13,965.