Pre Session Commentary - July 1 2009

Today domestic markets are likely to open negative as majority of Asian markets have opened in red. The sentiments are weak ever since the infrastructure sector that recorded a lower growth as compared to the previous year. Some early selling pressure is likely to erupt however as the day progresses the domestic traders would rely a lot on the movement of European markets. Range bound trade is what we expect for the day’s trading session.

On Tuesday, Indian market pared all opening gains and plunged sharply lower to close in red territory on profit taking led by report regarding slowdown in infrastructure growth. Moreover, the output of India''s infrastructure sector grew 2.8% in May from 3.1% in the same month last year, and this growth is slower than an upwardly revised 5% in April. Besides, investors were cautious ahead of Union Budget next week. BSE Sensex ended below 14,500 level and NSE Nifty below 4,300 mark. The market opened above the previous session''s closing tracking positive cues from the global markets. Asian markets were in green in early trading and the US Markets ended higher on Monday as investors showed confidence and bid stocks up in broad-based fashion. The energy stocks remained in focus bolstered by higher oil prices. However, domestic market lost ground soon after start and exhibited volatility. Among those, most of the selling was witnessed in Realty, Metal, Power, Capital Goods, Bank, Oil & Gas, Pharma and Auto stocks. BSE Midcap and Smallcap stocks also followed the same trend. The markets are likely to trade range bound today with negative bias.

The BSE Sensex closed lower by 291.90 points at 14,493.84 and NSE Nifty ended down by 99.85 points at 4,291.10. BSE Mid Caps closed with losses of 153.75 and 147.82 points at 5,076.34 and 5,740.04 respectively. The BSE Sensex touched intraday high of 14,907.48 and intraday low of 14,420.41.

On Tuesday, the US Markets closed in red. The disappointing Consumer Confidence Index data for the month of June pulled the market sentiments towards southward. The Index recorded at 49.3 which was far below the expected and the consensus estimates. The second quarter gain data with regard to the financial sector which recorded nearly 44% gain incited investors to pull back in stock prices. S&P 500 finished June flat; or up just one-fifth of a point, however for the second quarter it recorded a gain of 17%. The CRB Commodity Index and the materials sector gained roughly 16% during the second quarter. Due to surge in the greenback, US light crude oil for August Futures delivery declined by 2.3% at $68.90 per barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) fell 82.38 points at 8,447.00 the NASDAQ Composite (RIXF) index fell by 9.02 points at 1,835.04 and the S&P 500 (SPX) declined by 7.91 points at 919.32.

Today major stock markets in Asia are trading mixed. Hang Seng is low by 149.78 points at 18,378.73. Shanghai Composite is up by 26.73 points at 2,986.094. Japan''s Nikkei is trading up by 47.58 points at 10,006.02. Strait Times is low by 3.22 points at 2,329.92. KLSE Composite is flat at 1,075.24.

Indian ADRs plunged on Tuesday following a slump in Wall Street. In the IT space, Satyam Computers was down 4.6%, Infosys was down 1.24%, Wipro was down 0.42% and Patni Computers was down 0.36%.In the banking space, ICICI Bank was down 4.22% and HDFC Bank was down 2.13%. In the telecom space, MTNL was down 0.91% while Tata Communication was up 0.2%.In other sectors, Tata Motors was down 9.36%, Sterlite Industries was down 5.54% while Dr Reddy''s Labs was up 1.13%.

The FIIs on Tuesday stood as net buyers in equity and net sellers in debt. The Gross equity purchased stood at Rs 2,888.10 Crore and gross debt purchased stood at Rs 147 Crore, while the gross equity sold stood at Rs 1,990.90 Crore and gross debt sold stood at Rs 155 Crore. Therefore, the net investment of equity and debt reported were Rs 397.20 Crore and Rs (8) Crore respectively.

On Tuesday, the partially convertible rupee ended at Rs 47.90/91, 0.41% stronger than its previous close at 48.10/11. The exporter dollar sales the FIIs inflow followed by some buying form importers kept the rupee at a flat end.

On BSE, total number of shares traded were 49.94 Crore and total turnover stood at Rs 6,784.02 Crore. On NSE, total number of shares traded was 97.41 Crore and total turnover was Rs 19,339.45 Crore.

On NSE Future and Options, total number of contracts traded in index futures was 759852 with a total turnover of Rs 15,978.49 Crore. Along with this total number of contracts traded in stock futures were 658956 with a total turnover of Rs 18,754.49 Crore. Total numbers of contracts for index options were 730449 with a total turnover of Rs 16,273.56 Crore and total numbers of contracts for stock options were 38137 and notional turnover was Rs 1,6273.56 Crore.

Today, Nifty would have a support at 4,233 and resistance at 4,345 and BSE Sensex has support at 14,285 and resistance at 14,612.