Pre Session Commentary - Aug 19 2009

Today domestic markets are likely to open positive as there is no negative news in the markets. Meanwhile US markets have closed positive after some rebound happening across broader level similar to that of domestic markets yesterday. Asian markets are trading mixed and therefore there is hardly any guidance for traders, which will result in a range bound trade along the base line today.

On Tuesday, Domestic markets closed positive with some rebound happening across broader level as against previous day’s heavy losses. Domestic market ended the session with handsome gains backed by significant buying that emerged after Asian markets reversed losses. Higher US index futures also added to sentiments. Market touched the day’s high during afternoon trade mirroring firm European markets though afterwards pared gains a bit. However, monsoon worries continued to remain a key concern as 9 States have declared drought. Meanwhile, Finance Minister Pranab Mukherjee said that government has no proposal to write off loans taken by farmers as it did in 2008 in its first term in office. Further, India’s July export is down 26% from a year earlier. The BSE Sensex ended above 15,000 level and NSE Nifty closed above 4,450 mark.

The BSE Sensex closed higher by 250.34 points or (1.69%) at 15,035.26 and NSE Nifty ended up by 71 points or (1.62%) at 4,458.90. BSE Mid Caps and Small Caps closed with gains of 111.04 and 129.74 points at 5,496.55 and 6,341.45 respectively. The BSE Sensex touched intraday high of 15,134.51 and intraday low of 14,740.26.

On Tuesday, US stock markets closed higher. There was little rebound in the broader level from the previous session’s sharp decline. Buyers picked up stocks at low prices to give a good start for the markets. Financial stocks were the charm of the day as it gained a remarkable 1.9% during the session as against previous session’s loss of 4%. On the macro economic level housing starts and building permits for July recorded a slower-than-expected annualized rate of 581,000 and 560,000, respectively. Meanwhile, overall producer prices for the month of July declined 0.9%, which was more than what had been expected. Core prices made a surprise 0.1% decline, which suggests that inflationary pressures remain restricted. US light crude oil futures for September delivery closed at $69.19 per barrel up by 3.7% on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed higher by 82.60 points at 9,217.94, NASDAQ index inclined by 25.08 points to 1,955.92 and the S&P 500 (SPX) closed higher by 9.94 points at 989.67.

Today major stock markets in Asia are trading mixed. Japan''s Nikkei is trading down by 24.34 points at 10,260.62 followed by Hang Seng which is trading lower by 68.02 points at 20,238.25. Taiwan Weighted is trading also trading higher by 33.25 points at 6,823.02. Seoul Composite is also up by 5.28 points at 1,555.52. Strait Times is low by 14.26 points at 2,553.46.

Indian ADRs ended in green on Tuesday. In the IT space, Satyam Computers was up 5.24%, Patni Computers was up 3.52%, Infosys was up 0.71% and Wipro was up 0.55%. In the banking space, ICICI Bank was up 3.28% and HDFC Bank was up 3.63%. In the telecom space, Tata Communication was up 0.88% and MTNL was up 0.27%. In other sectors, Sterlite Industries was up 3.72%, Dr Reddy''s Labs was up 3.58% and Tata Motors was up 3.29%.

The FIIs on Tuesday stood as net sellers in equity and net buyers in debt. Gross equity purchased stood at Rs 1,766.40 Crore and gross debt purchased stood at Rs 2,740.20 Crore while the gross equity sold stood at Rs 550.10 Crore and gross debt sold stood at Rs 122.30 Crore. Therefore, the net investment of equity reported was Rs (973.80) Crore and net debt was Rs 427.80 Crore.

On Tuesday, the partially convertible rupee ended at 48.79/80 per dollar, 0.33% weaker than previous close at 48.95/96. Rupee gained strength on the back of surge in local stock markets that has raised concerns of dollar inflow.

On BSE, total number of shares traded were 40.35 Crore and total turnover stood at Rs 5,189.12 Crore. On NSE, total number of shares traded were 84.56 Crore and total turnover was Rs 15,795.70 Crore.

Top traded volumes on NSE Nifty – Unitech with total volume traded 84611851 shares, followed by Suzlon Energy with 41260777, Hindalco with 14262790, DLF with 12873196 and Tata Steel with 11763155 shares.

On NSE Future and Options, total number of contracts traded in index futures was 889389 with a total turnover of Rs 18,758.01 Crore. Along with this total number of contracts traded in stock futures were 581616 with a total turnover of Rs 18,176.64 crore. Total numbers of contracts for index options were 1556191 with a total turnover of Rs 35,111.01 Crore and total numbers of contracts for stock options were 50168 and notional turnover was Rs 1,610.08 Crore.

Today, Nifty would have a support at 4,385 and resistance at 4,512 and BSE Sensex has support at 14,886 and resistance at 15,225