Pre Session Commentary - July 20 2009

Today domestic markets are likely to open positive. The US markets took a breather on Friday after exemplary rally during the last couple of weeks. Asian markets have opened with phenomenal gains today as traders are optimistic about the firmness of the recent rally. One could witness an early surge in the domestic arena today, however as the day’s trade would progress, traders are likely to wait for cues from the opening of European markets.

On Friday, domestic markets closed with phenomenal gains. The positive cues from Asian markets and also better than expected corporate results helped markets gain at broader level. The Oral Care major Colgate Palmolive reported consolidated net profit of Rs. 103 crore, phenomenal surge of 43 per cent for the quarter ended June 30, 2009 as compared to Rs 72 crore in the corresponding quarter last financial year. In the BFSI space, India Infoline reported net profit of Rs. 51.67 crore during the quarter ended June 30, 2009, fractionally higher than Rs. 49.53 crore in the same period last year. Amongst sectors Auto, Bankex, IT and Teck were the leaders with gains of 5.16%, 4.76%, 4.11% and 4.09% respectively. BSE Mid Caps and Small Caps also gained by 2.31% and 2.44% respectively. Today markets are likely to trade positive with an essence of volatility.

The BSE Sensex closed with phenomenal gain of 494.67 points at 14,744.92 and NSE Nifty ended higher by 143.55 points at 4,374.95. BSE Mid Caps and Small Caps closed with gains of 115.17 and 135.34 points at 5,105.59 and 5,680.90 respectively. The BSE Sensex touched intraday high of 14,800.70 and intraday low of 14,325.58.

On Friday, the US stocks markets closed flat after traders took a breather after phenomenal rally in the past couple of days. Good earnings reported by industry giants like IBM (IBM 115.42, +4.78), Google (GOOG 430.25, -12.35), Bank of America (BAC 12.89, -0.28), Citigroup (C 3.02, -0.01), and General Electric (GE 11.65, -0.75), couldn’t stop traders from taking a rest after a long rally during the last couple of weeks. The trading spirit was lethargic as only 1 billion shares exchanged hands in NYSE, far below the 50-day moving average of 1.3 billion. Homebuilders (+2.3%) and home improvement retailers (+1.3%) recorded phenomenal gains amid news that housing starts and building permits data for June came in higher than expected. US light crude oil futures for August delivery closed at $63.56 per barrel up by 2.5% on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) advanced by 32.12 points at 8,743.94, NASDAQ index gained 1.58 points to 1,886.61 and the S&P 500 (SPX) closed flat at 940.38.

Today major stock markets in Asia are trading positive. Hang Seng is up by 469.07 points at 19,274.73. Shanghai Composite is up by 48.99 points at 3,238.74. Strait Times is up by 20.02 points at 2,450.98. Seoul Composite is up by 35.33 points at 1,475.43. KLSE Composite is also up by 14.45 points at 1,120.90.

The Indian ADRs ended higher on Friday. In the IT pack, Satyam was up 7.07%, Wipro was up 3.08%, Infosys was up 2.95% and Patni was up 0.60%. In the banking space, ICICI Bank was up 3.78% and HDFC Bank was up 1.12%. In the telecom sector, Tata Comm was up 3.43%, while MTNL was down 0.77%. In the other space, Dr Reddys was up 0.70%, Sterlite was up 4.29% and Tata Motors was up 1.97%.

The FIIs on Friday stood as net buyers in equity and debt. Gross equity purchased stood at Rs 2,618.50 Crore and gross debt purchased stood at Rs 555.50 Crore while the gross equity sold stood at Rs 2,326.70 Crore and gross debt sold stood at Rs 269.40 Crore. Therefore, the net investment of equity reported was Rs 291.80 Crore and net debt was Rs 286.10 Crore.

On Friday, the partially convertible rupee ended at Rs 48.73/74, 0.1% weaker than its previous close at 48.68/69. The rupee lost its strength due to demand from state run banks most likely for payments for defence imports.

On BSE, total number of shares traded were 44.26 Crore and total turnover stood at Rs 6,653.58 Crore. On NSE, total number of shares traded were 92.45 Crore and total turnover was Rs 18,123.41 Crore.

Top traded volumes on NSE Nifty – Unitech with total volume traded 45944445 shares, followed by Suzlon Energy with 42693818, DLF with 13560545, SAIL with 11731225 and ICICI Bank with 10057555 shares.

On NSE Future and Options, total number of contracts traded in index futures was 815316 with a total turnover of Rs 17,002.94 Crore. Along with this total number of contracts traded in stock futures were 609834 with a total turnover of Rs 17,423.51 crore. Total numbers of contracts for index options were 1757732 with a total turnover of Rs 38,191.11 Crore and total numbers of contracts for stock options were 55766 and notional turnover was Rs 1,637.34 Crore.

Today, Nifty would have a support at 4,342 and resistance at 4,452 and BSE Sensex has support at 14,685 and resistance at 14,987.