Pre Session Commentary - Aug 18 2009

Today domestic markets are likely to open negative as the US markets closed in negative territory after the disappointment over the Japanese economy which showed lower than expected growth of 0.9% during the second quarter. The sentiments across Asia are weak and therefore in the domestic market one could witness another day of selling pressure. During the day the domestic markets are likely to trade range bound with negative bias.

On Monday, Domestic markets closed with heavy losses. The domestic market today nosedived deep into red terrain on huge selling pressure over the ground as unsatisfactory US consumer sentiment report weakened concerns about the recovery in global economy. Market closed near day’s low tracking negative European markets. In addition, weak Asian markets along with lower US index futures also took huge beating on the bourses. Meanwhile, benchmark indices also exhibited weakness on monsoon worries as the country is going towards the worst drought year over the last two decades. The BSE Sensex ended below 14,800 level and NSE Nifty closed below 4,400 mark. During final trading hours, market slipped sharply and widened its negative gap to end the day with huge losses on intense selling pressure over the stocks. From the sectoral front, investors offloaded positions across the sectors. Besides, Realty, Metal, Auto, Oil & Gas, Bank, Capital Goods, FMCG and Consumer Durables stocks contributed to most of the selling pressure. Broader markets also supported the negative sentiments as BSE Midcap and Smallcap stocks lost more than 3% each.

The BSE Sensex closed lower by 626.71 points or (4.07%) at 14,784.92 and NSE Nifty ended down by 24.95 points at 4,580.05. BSE Mid Caps and Small Caps closed with losses of 218.30 and 200.85 points at 5,385.51 and 6,211.71 respectively. The BSE Sensex touched intraday high of 15,284.23 and intraday low of 14,740.63.

On Monday, US stock markets closed lower. Profit taking in the wake of slower-than-expected economic growth in Japan triggered a global sell-off that sent stocks below their recent trading ranges and handed the major U.S. indices their worst single-session percentage loss in six weeks. With stocks looking overextended in the near term, overseas participants moved against stocks upon learning that Japan''s economy expanded at a slower-than-expected rate of 0.9% in the second quarter. In turn, Japan''s Nikkei shed 3.1%, while several other major Asian averages also finished with losses exceeding 3%. US light crude oil futures for September delivery closed at $66.75 per barrel lower by 1.1% on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed lower by 186.06 points at 9,135.34, NASDAQ index declined by 54.68 points to 1,930.84 and the S&P 500 (SPX) closed lower by 24.36 points at 979.73.

Today major stock markets in Asia are trading negative. Japan''s Nikkei is trading down by 21.42 points at 10,247.19 followed by Hang Seng which is trading lower by 155.59 points at 19,982.155.59, and Taiwan Weighted is trading also trading lower by 132.77 points at 6,843.27.

Indian ADRs plunged on Monday. In the IT space, Satyam Computers was down 6.36%, Patni Computers was down 5.77%, Wipro was down 4.8% and Infosys was down 3.13%. In the banking space, ICICI Bank was down 6.82% and HDFC Bank was down 2.75%. In the telecom space, Tata Communication was down 6.12% and MTNL was down 4.8%. In other sectors, Sterlite Industries was down 8.63%, Tata Motors was down 7.63% and Dr Reddy''s Labs was down 5.04%.

The FIIs on Monday stood as net buyers in equity and net sellers in debt. Gross equity purchased stood at Rs 2,639.90 Crore and gross debt purchased stood at Rs 447.60 Crore while the gross equity sold stood at Rs 1,609.20 Crore and gross debt sold stood at Rs 821.00 Crore. Therefore, the net investment of equity reported was Rs 1,030.70 Crore and net debt was Rs (373.40) Crore.

On Monday, the partially convertible rupee ended at 48.95/96 per dollar, 1.47% weaker than previous close at 48.24/25. Rupee lost the strength against the dollar on the back of huge selling pressure in the local stock markets that led to huge losses in benchmark indices raising further concerns of greenback inflow.

On BSE, total number of shares traded were 37.72 Crore and total turnover stood at Rs 4,977.50 Crore. On NSE, total number of shares traded were 83.57 Crore and total turnover was Rs 15,425.56 Crore.

Top traded volumes on NSE Nifty – Suzlon Energy with total volume traded 60045516 shares, followed by Unitech with 48357785, DLF with 10765817, Tata Steel with 9396975 and Idea Cellular with 8828467 shares.

On NSE Future and Options, total number of contracts traded in index futures was 787408 with a total turnover of Rs 16,578.8 Crore. Along with this total number of contracts traded in stock futures were 526933 with a total turnover of Rs 16,261.97 crore. Total numbers of contracts for index options were 1596210 with a total turnover of Rs 36,217.85 Crore and total numbers of contracts for stock options were 60574 and notional turnover was Rs 1,924.57 Crore.

Today, Nifty would have a support at 4,491 and resistance at 4,596 and BSE Sensex has support at 14,536 and resistance at 14,896.