Pre Session Commentary - June 26 2009

Today domestic markets are likely to open positive as the US first quarter GDP data showed a contraction of 5.5% as against 5.7% decline that was previously reported. The US markets closed with phenomenal gains thus inspiring other Asian markets that have also opened in green. There could be a range bound trade in the domestic arena despite positive influence from other markets.

On Thursday, domestic markets closed in red due to late selling pressure. The markets could not hold on the early gains due to weak opening of the European markets. The morning rally had occurred on the back of phenomenal northward trend of the Asian markets however the domestic traders ignored the movement to Asian markets and rather followed the southward trend of the European markets. Sectors like Auto, Oil and PSU were the laggards of the day with losses of 2.18%, 2.10% and 1.71% respectively. On the other hand, Realty and Bankex managed to close in green with gains of 0.53% and 0.38% respectively. We expect the markets to be trading range bound.

The BSE Sensex closed with a loss of 77.11 points at 14,345.62 and NSE Nifty ended with a loss of 51.10 points at 4,241.85. BSE Mid Caps and Small Caps closed with losses of 9.94 points and 26.01 points at 5,149.90 and 5,693.02 respectively. The BSE Sensex touched intraday high of 14,578.46 and intraday low of 14,261.14.

On Thursday, the US Markets closed with phenomenal gains on the back of first quarter GDP data that showed a contraction of 5.5% as against 5.7% decline that was previously reported. The traders came back with a lot of exuberance across the broader level. The session’s broad based buying also helped CRB commodity index to record a gain of 1.4%. On the darker side the jobless claims for the week ending June 13 that totaled 627,000 was up than expected and also more than previous week. Bond markets also witnessed phenomenal buying this session after a $27 billion auction of 7-year Notes saw better-than-expected results. The US light crude oil for August Futures delivery inclined by 2.2% at $70.15 per barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed up by 172.54 points at 8,472.40 the NASDAQ Composite (RIXF) index inclined by 37.20 points at 1,829.54 and the S&P 500 (SPX) gained by 19.32 points at 920.26.

Today major stock markets in Asia are trading positive. Hang Seng is up by 186.28 points at 18,461.31. Shanghai Composite is low by 7.287 points at 2,917.759. Japan''s Nikkei is trading up by 50.48 points at 9,846.56. Strait Times is up by 22.06 points at 2,324.52. KLSE Composite is up by 16.26 points at 1,074.11.

Indian ADRs ended mostly higher on Thursday. In the banking space, ICICI Bank was up 5.16% and HDFC Bank was up 3.12%. In the IT space, Patni Computers was up 4.51%, Wipro was up 3.15%, Infosys was up 1.49% while Satyam Computers was down 1.18%. In the telecom space, MTNL was up 3.04% while Tata Communication was down 1.12%. In other sectors, Dr Reddy''s Labs was up 3.81%, Sterlite Industries was up 3.26% and Tata Motors was up 1.25%.

The FIIs on Thursday stood as net sellers in equity and debt. The Gross equity purchased stood at Rs 1,602.90 Crore and gross debt purchased stood at Rs 71.20 Crore, while the gross equity sold stood at Rs 2,204.10 Crore and gross debt sold stood at Rs 197.90 Crore. Therefore, the net investment of equity and debt reported were Rs (601.30) Crore and Rs (126.70) Crore respectively.

On Thursday, the partially convertible rupee closed 5 paise lower at 48.60/61 per dollar as compared to its previous close at 48.55/56. The Indian rupee ended low due to bearish local markets.

On BSE, total number of shares traded were 42.76 Crore and total turnover stood at Rs 5,654.81 Crore. On NSE, total number of shares traded was 123.97 Crore and total turnover was Rs 23,570.02 Crore.

Top traded volumes on NSE Nifty – Unitech with total volume traded 93887743, followed by Suzlon Energy with 66885125, NTPC with 20495167, SAIL with 18786896 and DLF with 14364546.

On NSE Future and Options, total number of contracts traded in index futures was 1028417 with a total turnover of Rs 21,628.20 Crore. Along with this total number of contracts traded in stock futures were 652991 with a total turnover of Rs 36,098.15 Crore. Total numbers of contracts for index options were 1630359 with a total turnover of Rs 35,527.61 Crore and total numbers of contracts for stock options were 47108 and notional turnover was Rs 2,674.34 Crore.

Today, Nifty would have a support at 4,286 and resistance at 4,378 and BSE Sensex has support at 14,428 and resistance at 14,624.