Pre Session Commentary - June 2 2009

Today domestic markets are likely to open positive as the US markets closed with phenomenal gains on the back of better than expected economic data. The US personal income for April inclined by a surprise 0.5% and personal spending was better than expected decline of 0.1%. The construction spending was higher by 0.8% for April which was far better than expected. In the domestic arena the UPA government is likely to come up with array of stimulus for exports, infrastructure and other key sectors along with the disinvestment policy. Markets are likely to thrust on the back good feel factor across the global markets.

On Monday, the domestic markets closed positive on the back of phenomenal rally in markets across the world. The sentiments bolstered due to better than expected Chinese official purchasing manager’s index that recorded at 53.1 points is above 50 points mark for the third successive month. In the domestic arena the session got in a zigzag mode after some profit booking pressures tried pulling the frontline stocks. Sectors like Realty, Metal, IT, FMCG, and CD inclined by 5.65%, 5.32%, 3.95%, 2.76% and 2.68% respectively. On the other hand, Mid cap and Small cap stocks outshined benchmark indices with exemplary gains of 2.92% and 3.51% respectively. We expect the markets to be trading positive.

The BSE Sensex closed with gain of 215.38 points at 14,840.63 and NSE Nifty inclined by 80.95 points at 4,529.90. BSE Mid Caps and Small Caps closed with gains of 147.47 points and 209.96 points at 5,204.21 and 6,196.78 respectively. The BSE Sensex touched intraday high of 14,906.81 and intraday low of 14,655.49.

On Monday, the US Markets closed in green on the back of good economic data. Flurry of economic data pleased the investors bringing broad based buying sentiments that pushed S&P 500 to fresh highs for 2009 and the index also managed to close above 200-day moving average for the first time since December 2007. The personal income for the month of April recorded a surprise growth of 0.5% and on the other hand the personal spending for April declined a better than expected 0.1%. Construction spending for the month of April showed a surprise growth of 0.8% month-over-month. The ISM Manufacturing index for May was also inline with the expectations at 42.8. Finally General Motors has submitted for bankruptcy with the U.S. government which in turn will provide $30 billion for a 60% stake in the company. GM and Citigroup will be replaced in Dow Jones with Cisco and Travellers respectively with effect from June 8 onwards. The US light crude oil for July delivery inclined by 3.2% to settle at $68.40 per barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed high by 221.11 points at 8,721.44, the NASDAQ Composite (RIXF) index inclined by 54.35 points to close at 1,828.68 and the S&P 500 (SPX) gained 23.73 points to close at 942.87.

Indian ADRs ended Positive. In technology sector, Satyam and Wipro closed up by (7.55%) and (5.59%) respectively. In banking sector ICICI Bank and HDFC Bank surged (3.02%) and (1.90%) respectively. In telecommunication sector, MTNL and Tata Communication gained (6.05%) and (4.66%) respectively. However, Sterlite Industries galloped by (6.99%).

Today major stock markets in Asia are trading positive. Hang Seng is low by 88.86 points at 18,799.73. Shanghai Composite is up by 17.58 points at 2,738.82. However Japan''s Nikkei is trading up by 65.82 points at 9,743.57. Strait Times is also up by 23.79 points at 2,403.86. Seoul Composite is also up by 13.18 points at 1,428.28.

The FIIs on Monday stood as net buyers in equity and sellers in debt. Gross equity purchased stood at Rs 5,979.30 Crore and gross debt purchased stood at Rs 79.00 Crore, while the gross equity sold stood at Rs 5,145.10 Crore and gross debt sold stood at Rs. 0.00 Crore. Therefore, the net investment of equity and debt reported were Rs 834.20 Crore and Rs 79.00 Crore respectively.

On Monday, the partially convertible rupee closed at 46.94/95 per dollar, 0.4% stronger than it previous close at 47.11/12. The rupee gained strength on the phenomenal consecutive surge in local stock markets.

On BSE, total number of shares traded were 69.53 Crore and total turnover stood at Rs 8,177.61 Crore. On NSE, total number of shares traded was 150.80 Crore and total turnover was Rs 24,877.16 Crore.

Top traded volumes on NSE Nifty – Unitech with 136155389 shares, Suzlon Energy with 95946316 shares, DLF with 18098160 shares, Hindalco with 15040839 shares, followed by Reliance Comm with 14485796 shares.

On NSE Future and Options, total number of contracts traded in index futures was 552064 with a total turnover of Rs 11,860.39 Crore. Along with this total number of contracts traded in stock futures were 454214 with a total turnover of Rs 26,029.86 Crore. Total numbers of contracts for index options were 822133 with a total turnover of Rs 18,925.12 Crore and total numbers of contracts for stock options were 29166 and notional turnover was Rs 1669.02 Crore.

Today, Nifty would have a support at 4,570 and resistance at 4,628 and BSE Sensex has support at 14,996 and resistance at 15,125.