Pre Session Commentary- May 28 2009

Today domestic markets are likely to open negative as the US markets closed in red and the other Asian markets are also trading in the southward. The trading across broader level could be choppy amidst weak cues from other markets and also the expiry of the F&O today. Investors would trade cautiously to withstand the bearish cues from other markets across the world. The opening of the European markets may further guide the domestic sentiments as well.

On Wednesday, the domestic markets closed with whopping gains. The markets opened with phenomenal positive gap on the back of strong positive cues from the US and Asian markets. As the trading progressed, broader level buying reinforced the sentiments resulting huge gains in front line stocks and consequently the bench mark indices. The rally was further supported by a statement from Finance Minister Pranab Mukherjee, that the government should push long pending reforms in the financial sector to boost the real economy growth. Further on the back of anticipations that there could be further rate cut from the RBI, rate sensitive sectors like Realty and Bankex spurred with gains of 6.09% and 5.42% respectively. Sectors like Power, PSU, Metal and CG inclined by 4.89%, 4.71%, 4.67% and 4.24% respectively. Mid cap and Small cap stocks also were also in the lime light due to broader level buying as they inclined by 3.67% and 3.37% respectively. We expect the markets to be trading volatility.

The BSE Sensex closed gained by 520.41 points at 14,109.64 and NSE Nifty ended with a gain of 159.35 points at 4,276.05. BSE Mid Caps and Small Caps closed with gains of 173.28 points and 189.08 points at 4,897.37 and 5,797.74 respectively. The BSE Sensex touched intraday high of 14,122.78 and intraday low of 13,780.41.

On Wednesday, the US Markets closed in red. After a phenomenal rally in the previous trading session, the day started with a choppy trade on the back of mixed cues from corporate. Further as the trading session progressed the concerns of high treasury yield, which could complicate an economic recovery, prompted selling pressure. There was news that General Motors has offered a $27 billion bond exchange, however this could not support the market sentiments. On the other hand better than expected earnings report from the corporate helped bringing in mixed trading in the early trading session. Besides, the auction of 5-year government notes carrying a 2.3% yield came with a solid bid-to-cover ratio of 2.3. The mortgage origination sellers took to hedge their positions and consequently pressured the long-end yield curve. That further pushed the yield of 10-year note to 3.7% to a fresh 2009 high. The US light crude oil for June delivery inclined by 1.6% to settle at $63.45 a barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed low by 173.47 points at 8,300.02, the NASDAQ Composite (RIXF) index declined by 19.35 points to close at 1,731.08 and the S&P 500 (SPX) lost 17.27 points to close at 893.06.

Indian ADRs ended mixed. In technology sector, Patni Computers closed down by (0.88%) while Infosys closed up by (0.62%) and followed by Wipro that gained (0.72%). In banking sector HDFC Bank fell by (0.78%) While ICICI Bank gained by (0.21%). In telecommunication sector, MTNL gained enormously by (10.97% While Tata Communication lost (5.26%). However, Sterlite Industries galloped by (6.73%).

Today major stock markets in Asia are trading negative. Hang Seng and Shanghai markets are closed today. However Japan''s Nikkei is trading low by 7.85 points at 9,430.92, Strait Times is low by 20.63 points at 2,285.45 Seoul Composite is also low by 7.77 points at 1,354.25 respectively.

On Wednesday, the partially convertible rupee closed at 47.70/71 per dollar, 0.38% stronger than it previous close at 47.88/90. The rupee gained strength on the back phenomenal surge in local stock markets.

On BSE, total number of shares traded were 70.60 Crore and total turnover stood at Rs 6,932.67 Crore. On NSE, total number of shares traded was 118.26 Crore and total turnover was Rs 206.33 Crore.

Top traded volumes on NSE Nifty – Unitech with 57311447 shares, Idea Cellular with 42227245 shares, Suzlon Energy with 31167714 shares, DLF with 19358577 shares, followed by Reliance Comm with 16337134 shares.

On NSE Future and Options, total number of contracts traded in index futures was 880361 with a total turnover of Rs 18,216.98 Crore. Along with this total number of contracts traded in stock futures were 662829 with a total turnover of Rs 33,935.38 Crore. Total numbers of contracts for index options were 1389547 with a total turnover of Rs 29,435.69 Crore and total numbers of contracts for stock options were 38066 and notional turnover was Rs 1,976.83 Crore.

Today, Nifty would have a support at 4,156 and resistance at 4,305 and BSE Sensex has support at 13,798 and resistance at 14,238.