Pre Session Commentary - Aug 13 2009

Today domestic markets are likely to open with positive as all the Asian markets are also trading in northward direction. The US markets closed with gains on the Fed’s accompanying statement and also the fed funds rate remaining unchanged at 0.00-2.00%. In the domestic arena the IIP data for the month of June recorded phenomenal growth of 7.8% which helped markets to rebound during the previous day’s trade. Today one could expect some rebound happening across the broader level.

On Wednesday, Domestic markets closed negative after late buying. Market opened on downbeat note tracking weak cues from the global markets. The Asian markets were down and US stocks markets closed lower on Tuesday, due to broad based selling led by banking stocks. Stocks skidded for the second consecutive day as investors awaited the Federal Reserve''''s latest decision on monetary policy and guidance on the outlook for recovery from the recession. Further, the investors were closely watching the industrial output that was data due later in the day. The IIP improved sharply in the month of June 2009 reporting a growth of 7.8%. Stocks continued to extend losses till afternoon mainly on concern that lesser than normal rain may weigh down economic recovery. However, market started recovering during final trading hours and minimized losses at the end on positive European markets. From the sectoral front, IT, Metal, PSU, Oil & Gas, Bank and Capital Goods witnessed most of the selling pressure. However, Realty, Pharma and Auto stocks were able to gain favour from the market. The BSE Midcap and Smallcap indices also remained on buyers’ radar.

The BSE Sensex closed lower by 54.43 points at 15,020.16 and NSE Nifty ended down by 13.85 points at 4,457.50. BSE Mid Caps and Small Caps closed with gains of 15.11 and 28.71 points at 5,414.53 and 6,134.93 respectively. The BSE Sensex touched intraday high of 15,043.62 and intraday low of 14,071.05.

On Wednesday, US stock markets closed higher. FOMC leaves the fed funds rate unchanged at 0.00% to 2.00%. There was no negative news in the markets and therefore a lot of buying supported extended gains across broader level. Traders were also concerned about Fed''s accompanying statement, which indicated that the FOMC expects inflation to remain subdued for some time and economic activity is likely to remain weak for some time. The FOMC also said sluggish income growth will constrain household spending, though members hold the belief that economic activity is leveling out. Financial stocks were the leaders with gains of 2.0%, whereas consumer staples were the laggard of the day. US light crude oil futures for September delivery closed at $70.16 per barrel higher by 1.0% on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed higher by 120.61 points at 9,361.61, NASDAQ index inclined by 28.99 points to 1,998.72 and the S&P 500 (SPX) closed higher by 11.46 points at 1005.81.

Today major stock markets in Asia are trading in positive territory. Shanghai Composite is low by 12.32 points at 3,100.39. Japan''s Nikkei is trading up by 99.25 points at 10,534.25 followed by Strait Times and Seoul Composite which are also trading higher by 40.16 and 11.09 points at 2,611.47 and 1,576.44 respectively. Hang Seng is up by 397.65 points at 20,832.89 and Taiwan Weighted is up by 116.58 points at 7,015.48.

Indian ADRs ended in green on Wednesday. In the banking space, ICICI Bank was up 3.78% and HDFC Bank was up 1.83%. In the telecom space, MTNL was up 3.58% and Tata Communication was up 2.63%. In the IT space, Patni Computers was up 4.27%, Infosys was up 0.87%, Satyam Computers was up 3.22% and Wipro was up 1.84%. In other sectors, Tata Motors was up 4.80%, Sterlite Industries was up 1.62% and Dr Reddy''s Labs was up 1.41%.

The FIIs on Wednesday stood as net buyers in equity and net sellers in debt. Gross equity purchased stood at Rs 2,894.10 Crore, while the gross equity sold stood at Rs 2,190.00 Crore and gross debt purchased stood at Rs 91.80 Crore, while gross debt sold stood at Rs 254.30 Crore. The net investment of equity reported was Rs 704.20 Crore and net debt was Rs (162.50) Crore.

On Wednesday, the partially convertible rupee ended at 48.36/37, 0.83% weaker than its previous close at 47.96/97. The negative trading in the domestic markets pulled the local currency against dollar.

On BSE, total number of shares traded were 39.48 Crore and total turnover stood at Rs 5,917.26 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 60299149 shares, followed by Suzlon Energy with 43263196, Tata Steel with 15207451, DLF with 13292541 and Hindalco with 10913902 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 4,486 and resistance at 4,512 and BSE Sensex has support at 15,098 and resistance at 15,235.