Pre Session Commentary - June 3 2009

Today domestic markets are likely to open positive as the US markets closed in green for the fourth straight session on the back of better than expected new pending home sales data for the month of April. The Asian markets have opened with positive numbers however one could see the consolidation prevailing across Asia and domestic markets as well. In the domestic arena, core sector (Power, Crude Oil, Refinery, Cement and finished Steel) have shown phenomenal growth of 4.3% in the month of April. The April figures have increased hopes of better IIP data to come. FMCG sales for during April-May 2009 surged nearly 20% and therefore FMCG stocks can in the limelight today.Therefore one could witness stocks of core sectors to pick some charm of the day’s trade.

On Tuesday, the domestic markets closed flat after a volatile trading session. The markets opened with a phenomenal gap up however amidst profit booking pressures the benchmark indices collapsed. The weak opening of the European markets also added to negative sentiments prevailing due to psychological barrier. The madcap stocks recovered fast due to mutual fund buying at lower levels. The markets have gained enough to reach the peak level due to constant rally in the past few weeks. Sectors like CD, Metal, Auto and CG inclined by 2.63%, 2.48%, 1.37% and 0.31% respectively. On the other hand, Mid cap and Small cap stocks gained by 0.82% and 0.91% respectively. We expect the markets to be trading positive with an essence of volatility.

The BSE Sensex closed with gain of 34.28 points at 14,874.91 and NSE Nifty ended flat at 4,525.25. BSE Mid Caps and Small Caps closed with gains of 42.47 points and 56.20 points at 5,246.68 and 6,252.98 respectively. The BSE Sensex touched intraday high of 14,994.31 and intraday low of 14,608.23.

On Tuesday, the US Markets closed in green for the fourth consecutive session with broad based buying. The pending new home sales data for April showed a phenomenal surprise growth of 6.7%, which is the third straight increase. On stock specific note, Ford gained more than 20% on the back of news from the company that it has achieved highest market share in three years. However in the US auto sales for May fell a less than expected 24%. The bankrupt GM said that its May sales have declined by 30% and simultaneously Honda and Toyota Motors have said that their sales for the month of May has fallen by drastic 39% and 38% year-over-year respectively. In the financial space JPMorgan Chase pull the financial sector by 1.2% after it announced that it plans to repay the TARP fund by raising $5.0 billion in common equity. American express announced $500 million common stock offering while, Morgan Stanley announced to raise $2.2 billion. The US light crude oil for July delivery inclined by 0.25% to settle at $68.57 per barrel on the New York Mercantile Exchange. Crude oil futures are up by a phenomenal 93% since hitting a 2009 low on Jan. 15.

The Dow Jones Industrial Average (DJIA) closed high by 19.43 points at 8,740.87, the NASDAQ Composite (RIXF) index inclined by 8.12 points to close at 1,836.80 and the S&P 500 (SPX) gained 1.87 points to close at 944.74.

Indian ADRs ended Mixed. In technology space, Satyam and Patni closed up by (20.61%) and (13.10%) respectively. In banking sector ICICI Bank and HDFC Bank plunged (0.84%) and (0.11%) respectively. In telecommunication sector, MTNL gained (0.22%) while Tata Communication moved left (2.93%). However, Sterlite Industries continued its upside by (2.48%).

Today major stock markets in Asia are trading positive. Hang Seng is up by 307.27 points at 18,712.33. Shanghai Composite is up by 23.657 points at 2,747.96. However Japan''s Nikkei is trading up by 30.52 points at 9,734.83. KLSE Composite is flat at 1,063.79.

The FIIs on Tuesday stood as net buyers in equity and sellers in debt. Gross equity purchased stood at Rs 3,798.50 Crore and gross debt purchased stood at Rs 183.50 Crore, while the gross equity sold stood at Rs 3,180.60 Crore and gross debt sold stood at Rs. 362.00 Crore. Therefore, the net investment of equity and debt reported were Rs 617.90 Crore and Rs (178.40) Crore respectively.

On Tuesday, the partially convertible rupee closed at 47.02/03 per dollar, 0.4% stronger than it previous close at 46.94/95. The rupee lost its charm due to the dwindling local stock markets.

On BSE, total number of shares traded were 89.46 Crore and total turnover stood at Rs 9,476.77 Crore. On NSE, total number of shares traded was 169.36 Crore and total turnover was Rs 25,721.06 Crore.

Top traded volumes on NSE Nifty – Unitech with 108816466 shares, Suzlon Energy with 50922971 shares, DLF with 21745607 shares, Hindalco with 19224085 shares, followed by Tata Steel with 17612634 shares.

On NSE Future and Options, total number of contracts traded in index futures was 637199 with a total turnover of Rs 13,769.68 Crore. Along with this total number of contracts traded in stock futures were 477559 with a total turnover of Rs 27,458.19 Crore. Total numbers of contracts for index options were 890166 with a total turnover of Rs 20,433.47 Crore and total numbers of contracts for stock options were 31578 and notional turnover was Rs 1,963.28 Crore.

Today, Nifty would have a support at 4,489 and resistance at 4,598 and BSE Sensex has support at 14,810 and resistance at 15,145.