Pre Session Commentary - June 8 2009

Today domestic markets are likely to open positive as majority of Asian markets have also opened in the green. The opening trade would however start on a subdued note due to lack of any driving news. The government has finally declared the divestment of Rs. 6,500 crore during the current fiscal with IPOs of only two PSUs. On the other hand, the US employment data is showing signs of recovery and hence traders across the globe would capitalize on the improving conditions of US economy. The opening of the European markets would further decide the movement of domestic and Asian markets.

On Friday, the domestic markets closed with moderate gains thus recording the 13th consecutive weekly gain and the longest since August 2005. The session started with a subdued opening however as the day progressed the benchmark indices exuded firmness. The better U.S. jobs data helped boost the morale of traders across Asia and Europe. Further the mining companies were in the limelight after Rio Tinto PLC scrapped $19.5 billion deal with China’s Chinalco and opted to raise $15.2 billion in equity sale and so as to setup a JV with rival BHP Billiton. The Capital Goods stocks were the charm of the day due to huge fund buying. On the other hand IT, gained due to signs of recovery in U.S. economy. Sectors like CG, IT, Auto and Tech inclined by 2.95%, 2.61%, 2.49% and 1.58% respectively. On the other hand, Mid cap and Small cap stocks were underperformers due to profit booking pressures and lost 0.67% and 1.02% respectively. We expect the markets to be trading volatile.

The BSE Sensex closed with a gain of 94.87 points at 15,103.55 and NSE Nifty ended up by 14.25 at 4,586.90. BSE Mid Caps and Small Caps closed with losses of 36.30 points and 66.54 points at 5,409.78 and 6,458.65 respectively. The BSE Sensex touched intraday high of 15,257.30 and intraday low of 14,993.60.

On Friday, the US Markets closed mixed. The markets started with a subdued trading sentiment as the non-farm better than expected job data of the previous day faded. Traders however started picking up stocks higher after the news about the payrolls data that fell by 345,000 during May. The job losses numbers were below the 520,000 that were expected and far below than the 504,000 that were recorded during the month of April. On the other hand on a macro economic scenario the unemployment data has reached 26 years high of 9.4% up from 8.9%. The semiconductor stocks were under pressure after the Semiconductor Association forecast a 21% yoy decline in 2009 worldwide sales. The US light crude oil for July delivery declined by 0.5% to settle at $68.43 per barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed high by 12.89 points at 8,763.13, the NASDAQ Composite (RIXF) index declined by 0.60 points to close at 1,849.42 and the S&P 500 (SPX) fell by 2.37 points to close at 940.09.

The Indian ADRs ended mixed on Friday. In the telecom space, Tata Comm was down 1.84% and MTNL was down 1.20%. In the banking space, ICICI Bank was up 1.34% while HDFC Bank was up 0.47%. In the IT space, Satyam was down 5.24%, Patni was down 3.84%, while Infosys was up 1.21% and Wipro was up 0.24%. In the other space, Dr Reddys was up 3.88%, Sterlite was up 1.43% and Tata Motors was up 1.45%.

Today major stock markets in Asia are trading positive. Hang Seng is low by 48.18 points at 18,631.35. Shanghai Composite is up by 10.97 points at 2,764.86. Japan''s Nikkei is trading up by 109.78 points at 9,877.79. Strait Times is also up by 17.88 points at 2,380.62. KLSE Composite is up by 11.53 points at 1,075.50.

The FIIs on Friday stood as net buyers in equity and debt. Gross equity purchased stood at Rs 3,626.10 Crore and gross debt purchased stood at Rs 398.10 Crore, while the gross equity sold stood at Rs 2,955.50 Crore and gross debt sold stood at Rs. 145.00 Crore. Therefore, the net investment of equity and debt reported were Rs 670.60 Crore and Rs 253.10 Crore respectively.

On Friday, the partially convertible rupee closed at 47.11/12 per dollar, 0.19% stronger than it previous close at 47.20/21. The rupee gained strength due to positive trend in local stock markets.

On BSE, total number of shares traded were 83.27 Crore and total turnover stood at Rs 8,997.38 Crore. On NSE, total number of shares traded was 162.31 Crore and total turnover was Rs 26,776.46 Crore.

Top traded volumes on NSE Nifty – Unitech with 100257779 shares, Suzlon Energy with 81375440 shares, ITC with 26355126 shares, Idear Cellular with 17353967 shares, followed by SAIL with 13473262 shares.

On NSE Future and Options, total number of contracts traded in index futures was 661210 with a total turnover of Rs 14,604.08 Crore. Along with this total number of contracts traded in stock futures were 475756 with a total turnover of Rs 29,441.38 Crore. Total numbers of contracts for index options were 859423 with a total turnover of Rs 19,882.74 Crore and total numbers of contracts for stock options were 33011 and notional turnover was Rs 2,010.19 Crore.

Today, Nifty would have a support at 4,545 and resistance at 4,656 and BSE Sensex has support at 14,938 and resistance at 15,298.