Pre Session Commentary - July 16 2009

Today domestic markets are likely to open positive as majority of Asian markets have opened in green. The US markets recorded exemplary gains in the overnight trade on the back of better than expected Intel’s results. The US Consumer Price Index also reported a sharper than expected increase for the month of June. Domestic markets are likely to extend its gains today as firm rally in US paves way for northward movement in Asian markets.

On Wednesday, domestic markets closed with phenomenal gains. The positive gap opening was boosted by the positive opening of Asian markets. Further as the session advanced, Finance Minister’s positive comments pumped the over all market sentiments. The revival of monsoon also boosted the markets at broader level. The FM has initiated discussion with other ministers on divesting portion of government’s holding in PSUs. Further PSUs will come out with fresh capital issue to meet their respective fund requirements. Sectors like Realty, Metal, Power and CG were the leaders of the day’s rally with gains of 7.98%, 5.67%, 4.77% and 4.66% respectively. BSE Midcap and Smallcap gained by 4.15% and 4.56% respectively. Today domestic markets are likely to trade positive.

The BSE Sensex closed high by 399.54 points at 14,253.24 and NSE Nifty gained 66.60 points at 4,178.00. BSE Mid Cap and Small Cap closed with gains of 198.36 points and 240.78 points at 4,978.64 and 5,523.80 respectively. The BSE Sensex touched intraday high of 14,299.54 and intraday low of 13,891.04.

On Wednesday, the US stocks markets closed with remarkable gains. The better than expected results reported by Intel boosted the buying sentiments across broader level. The Company reported quarterly earnings at 18 cents per share, much higher than the earnings forecast of 8 cents per share. The total revenue of $8 billion and gross margin of 51 per cent were far better than expected. On macro economic front, the Consumer Price Index recorded sharper than expected growth of 0.7% during the month of June. However, a 0.4% drop in June industrial production meant that production has fallen in 17 out of 18 months. But the decline was less than expected and the softest downturn since a positive reading in October 2008. The US light crude oil futures for August delivery closed at $61.51 per barrel up by 3.4 per cent on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed higher by 256.72 points at 8,616.21. NASDAQ index gained 63.17 points to 1,862.90 and the S&P 500 (SPX) closed up by 26.84 points at 932.68.

Today major stock markets in Asia are trading higher. Hang Seng is up by 321.85 points at 18,580.51. Shanghai Composite is up by 22.744 points at 3,211.295. Japan''s Nikkei is trading up by 138.48 points at 9,407.73. Strait Times is up by 25.97 points at 2,415.39. Seoul Composite is up by 9.7 points at 1,430.56 and KLSE Composite is up by 17.61 points at 1,097.24.

Indian ADRs rallied on Wednesday. In the IT space, Wipro was up 8.34%, Satyam Computers was up 7.16%, Infosys was up 3.52% and Patni Computers was up 4.02%. In the banking space, ICICI Bank was up 5.49% and HDFC Bank was up 3.59%. In the telecom space, MTNL was up 6.3% and Tata Communication was up 5.1%. In other sectors, Sterlite Industries was up 6.5%, Tata Motors was up 8.32% while Dr Reddy''s Labs, which was the sole loser among the ADRs, was down marginally by 0.44%.

On Wednesday, the partially convertible rupee ended at Rs 48.64/65, 0.7% stronger than its previous close at 48.96/09. The rupee gained strength on the back of phenomenal surge in local stock markets raising hopes for increased Dollar inflow.

The FIIs on Wednesday stood as net buyers in equity and debt. Gross equity purchased stood at Rs 2,106.90 Crore and gross debt purchased stood at Rs 318.00 Crore while the gross equity sold stood at Rs 1,654.00 Crore and gross debt sold stood at Rs 82.00 Crore. Therefore, the net investment of equity reported was Rs 452.90 Crore and net debt was Rs 236.00 Crore.

On BSE, total number of shares traded were 41.94 Crore and total turnover stood at Rs 5,460.73 Crore. On NSE, total number of shares traded were 92.18 Crore and total turnover was Rs 16,685.17 Crore.

Top traded volumes on NSE Nifty – Suzlon Energy with total volume traded 58400112 shares, followed by Unitech with 57442344, DLF with 14870347, ICICI Bank with 9562855 and SAIL with 8640681 shares.

On NSE Future and Options, total number of contracts traded in index futures was 631551 with a total turnover of Rs 12,761.55 Crore. Along with this total number of contracts traded in stock futures were 570741 with a total turnover of Rs 15,984.47 crore. Total numbers of contracts for index options were 1308845 with a total turnover of Rs 27,577.26 Crore and total numbers of contracts for stock options were 56721 and notional turnover was Rs 1,645.72 Crore.

Today, Nifty would have a support at 4,215 and resistance at 4,298 and BSE Sensex has support at 14,449 and resistance at 14,678.