Pre Session Commentary - Aug 12 2009

Today domestic markets are likely to open with negative gap as all the Asian markets are also trading in southward direction on the back of negative cues from US markets. The financial sector in the US markets was the worst hit as JPMorgan Chase & Co. degraded MBIA Inc, which is the biggest bond insurer. In the domestic arena the bearish sentiments are likely to percolate stocks at broader level. One could witness an early selling pressure across frontline stocks. Today domestic markets are likely to trade negative.

On Tuesday, Domestic markets closed positive after late buying. Firm Asian stocks along with recovery in US index futures led sharp rebound from initial lows in the domestic bourses. On 10th August 2009, the India Meteorological Department (IMD) slashed its forecast for the June-September South West monsoon for a second time in three months and said state governments were free to announce drought. Further, Indian benchmark indices rebounded sharply and continued to trade with gains as most of the Asian stocks witnessed rise. Investors were hopeful that economic reforms would advance economic growth and corporate earnings over the medium term. However, market skidded from the day’s high during final trading but managed to recover again to end on positive terrain. From the sectoral front, all indices ended in green barring PSU stocks. Auto, Realty, Metal, Pharma, Power, Oil & Gas and Teck stocks supported the market. BSE Midcap and Smallcap indices also witnessed buying during the trading.

The BSE Sensex closed higher by 64.82 points at 15,074.59 and NSE Nifty ended up by 33.70 points at 4,471.35. BSE Mid Caps and Small Caps closed with gains of 58.94 and 33.19 points at 5,399.42 and 6,106.22 respectively. The BSE Sensex touched intraday high of 15,218.65 and intraday low of 14,864.23.

On Tuesday, US stock markets closed lower. The markets tumbled due to weakness in financial sector after JPMorgan Chase & Co. said that credit losses may overwhelm capital at MBIA Inc. MBIA, the biggest bond insurer, tumbled 13 percent after JPMorgan cut the company to “underweight.” A group of S&P 500 financial shares lost 3.5%, the steepest decline since July 2 and the biggest yesterday among 10 industries. American International Group Inc., the insurer rescued by the government, slumped by 13% to $24.92. Bank of America Corp fell the most on the Dow, dropping 5% to $15.85. A separate government report showed inventories at U.S. wholesalers fell in June for a tenth straight month as a gain in sales helped distributors move out more of their excess supply. US light crude oil futures for September delivery closed at $69.45 per barrel lower by 1.6% on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed lower by 96.54 points at 9,241.45, NASDAQ index declined by 22.51 points to 1,969.73 and the S&P 500 (SPX) closed lower by 12.75 points at 994.35.

Today major stock markets in Asia are trading in negative territory. Shanghai Composite is low by 78.60 points at 3,186.13. Japan''s Nikkei is trading low by 121.32 points at 10,464.14 followed by Strait Times and Seoul Composite, which are also trading lower by 13.15, and 24.03 points at 2,584.15 and 1,555.18 respectively. However, Hang Seng is down by 512.24 points at 20,561.97 and Taiwan Weighted is low by 7.60 points at 6,901.42.

The FIIs on Tuesday stood as net sellers in equity and net buyers in debt. Gross equity purchased stood at Rs 2,972.80 Crore, while the gross equity sold stood at Rs 3,200 Crore and gross debt purchased stood at Rs 676.00 Crore, while gross debt sold stood at Rs 381.80 Crore. The net investment of equity reported was Rs (227.30) Crore and net debt was Rs 294.20 Crore.

On Tuesday, the partially convertible rupee ended at 47.96/97, 0.31% weaker than its previous close at 47.81/82. Lackluster movement of domestic markets during the last trading hour pulled the sentiments of traders and therefore local currency succumbed to green back’s strength.

On BSE, total number of shares traded were 34.10 Crore and total turnover stood at Rs 5,072.56 Crore. On NSE, total number of shares traded were 77.08 Crore and total turnover was Rs 15,992.79 Crore.

Top traded volumes on NSE Nifty – Unitech with total volume traded 49866863 shares, followed by Suzlon Energy with 43490782, Bharti Airtel with 11346060, Tata Motors with 11327981 and DLF with 11230552 shares.

On NSE Future and Options, total number of contracts traded in index futures was 847356 with a total turnover of Rs 18,006.14 Crore. Along with this total number of contracts traded in stock futures were 516285 with a total turnover of Rs 15,877.74 crore. Total numbers of contracts for index options were 1234591 with a total turnover of Rs 28,200.10 Crore and total numbers of contracts for stock options were 45336 and notional turnover was Rs 1,435.39 Crore.

Today, Nifty would have a support at 4,365 and resistance at 4,411 and BSE Sensex has support at 14,742 and resistance at 14,923