Pre Session Commentary - June 23 2009

Today domestic markets are likely to open negative as the US markets closed with heavy loss, the worst in the last two months. The Asian markets have also opened with heavy losses following the similar trend in US markets. One could witness some selling pressure during the opening session as there are weak cues emanating from Asia. Banking stocks could be under pressure accompanied with selling across broader level. The Sensex might test the 14k mark at lower level during the day’s trade.

On Monday, the domestic markets closed in red. The markets opened positive on the back of positive cues from other Asian markets and better business confidence data of Japan. The traders could not hold the buying sentiments and therefore the benchmark indices plunged in red after the weak opening of European markets. Trading thorough the day was with low volume ahead of the F&O expiry. Sectors like Oil & Gas, Power, Metal and Realty gained remarkably by 3.33%, 2.47%, 2.38% and 2.33% respectively. Mid cap and Small cap also felt the heat as they lost by 0.57% and 0.33% respectively. We expect the markets to be trading negative.

The BSE Sensex closed with a loss of 195.67 points at 14,326.22 and NSE Nifty ended with loss of 78.35 points at 4,235.25. BSE Mid Caps and Small Caps closed with losses of 28.22 points and 18.39 points at 4,930.51 and 5,599.57 respectively. The BSE Sensex touched intraday high of 14,668.40 and intraday low of 14,269.77.

On Monday, the US Markets closed with sharp losses. Due to lack of news and weak global cues the US markets suffered the worst single day loss in two months. Broad based selling erupted across the markets specifically in the financial space. Financials shed 6.2% and kept there southward descend throughout the session. Diversified financial services fell by 7.5% and specialized finance declined by 7.3% constituting the weakest performing stocks in the financial sector. Profit booking gulped the financial stocks as they are up nearly 50% from their March lows. Energy and materials stocks also fell by 4.6% and 5.3% respectively. The US light crude oil for July delivery, which expired at the close of the pit trade, fell by 3.6% at $67.06 per barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed low by 200.72 points at 8,339.01 the NASDAQ Composite (RIXF) index declined by 61.78 points at 1,766.19 and the S&P 500 (SPX) fell by 28.19 points at 893.04.

Today major stock markets in Asia are trading negative. Hang Seng is low by 599 points at 17,460.52. Shanghai Composite is low by 40.53 points at 2,855.72. Japan''s Nikkei is trading low by 269.02 points at 9,557.25. Strait Times is also low by 37.10 points at 2,229.82. KLSE Composite is low by 13.53 points at 1,045.97.

Indian ADRs ended lower on Monday. In the IT space, Satyam Computers was down 10.68%, Wipro was down 6.08%, Infosys was down 2.99% while Patni Computers remained unchanged. In the banking space, HDFC Bank was down 7.04% and ICICI Bank was down 5.46%. In the telecom space, Tata Communication was down 7.08% while MTNL was up 4.44%. In other sectors, Sterlite Industries was down 6.99%, Tata Motors was down 5.88% and Dr Reddy''s Labs was down 0.39%.

The FIIs on Monday stood as net sellers in equity and net buyers in debt. The Gross equity purchased stood at Rs 1,894.40 Crore and gross debt purchased stood at Rs 614.70 Crore, while the gross equity sold stood at Rs 1,920.50 Crore and gross debt sold stood at Rs 509.90 Crore. Therefore, the net investment of equity and debt reported were Rs (26.20) Crore and Rs 104.70 Crore respectively.

On Monday, the partially convertible rupee closed at 48.60/61 per dollar, 0.52 paise weaker than its previous close at 48.09/10. The local currency fell due to downtrend in local stock markets.

On BSE, total number of shares traded were 38.87 Crore and total turnover stood at Rs 5,143.85 Crore. On NSE, total number of shares traded was 89.57 Crore and total turnover was Rs 16,560.31 Crore.

On NSE Future and Options, total number of contracts traded in index futures was 779136 with a total turnover of Rs 16,446.80 Crore. Along with this total number of contracts traded in stock futures were 469049 with a total turnover of Rs 25,661.64 Crore. Total numbers of contracts for index options were 1245822 with a total turnover of Rs 27,238.21 Crore and total numbers of contracts for stock options were 38476 and notional turnover was Rs 2,254.40 Crore.

Today, Nifty would have a support at 4,077 and resistance at 4,169 and BSE Sensex has support at 13,910 and resistance at 14,152.