Pre Session Commentary - Aug 28 2009

Today domestic markets are likely to open negative as Asian markets are trading mixed. There is hardly any guidance from US or either Asian markets and therefore a subdued opening is likely to occur in domestic markets. The domestic benchmark indices are already at peak levels and any upward movement is less likely to happen, however there is no negative news as well that would erupt selling pressure. In the telecom space, the government has finally fixed the 3G spectrum bid price at Rs.3,500 crore that will help the government to fetch Rs. 25,000 crore from the overall auction. The domestic markets are likely to trade range bound today.

On Thursday, domestic markets closed marginally higher after a subdued session. Domestic market ended the day on flat note after making recovery from initial lows. After exhibiting weakness during the early trading, the benchmark Index rebounded in afternoon after Finance Minister Pranab Mukherjee said the economy is showing some positive signs. He expects more than 6% growth in the year ending March 2010 and over 8% growth in the year ending March 2011. However, market was volatile on the day of settlement of the August F&O series. Meanwhile, inflation rose to minus 0.95% for the week ended August 15 from minus 1.53% in the previous week. In addition, the government today unveiled its Foreign Trade Policy but did not announce any major sops for any sector. The BSE Sensex ended above 15,750 level and NSE Nifty closed above 4,650 mark.

The BSE Sensex closed slightly higher by 11.22 points at 15,781.07 and NSE Nifty ended marginally up by 7.35 points at 4,688.20. BSE Mid Caps and Small Caps closed with gains of 21.95 and 28.71 points at 5,822.50 and 6,907.06 respectively. The BSE Sensex touched intraday high of 15,883.71 and intraday low of 15,685.49.

On Thursday, US stock markets closed higher. The markets opened on a subdued note and continued trading with low intensity despite some major economic data. The preliminary second quarter GDP report showed better-than-expected 1.0% annualized decline. Further, consumer spending during the second quarter was also better-than-expected at a contraction of 1.0%, which was an improvement from the 1.2% decline that was previously reported. The initial jobless claims recorded at 570,000, which is down 10,000 from the previous week and in-line with expectations. Meanwhile, continuing claims is at 6.13 million, below expectations and down more than 100,000 from the previous week. US light crude oil futures for October delivery closed at $72.49 per barrel up by 1.5% on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed higher by 37.11 points at 9,580.63, NASDAQ index inclined by 3.30 points to 2,027.73 and the S&P 500 (SPX) closed high by 2.86 points at 1,030.98.

Indian ADR''s ended mixed on Thursday. In the telecom pack, Tata Comm was down 0.61% and MTNL was down 2.78%. In the banking space, ICICI Bank was up 0.03% but HDFC Bank was down 0.50%. In the IT sector, Infosys was up 1.38%, Wipro was up 0.62%, while Patni was down 5.23% and Satyam was down 0.91%. In the other space, Dr Reddys was down 1.49%, Tata Motors was down 0.33% but Sterlite was up 0.79%.

The FIIs on Thursday stood as net buyers in equity and net sellers in debt. Gross equity purchased stood at Rs 2,812.60 Crore and gross debt purchased stood at Rs 98.60 Crore, while the gross equity sold stood at Rs 1,776.70 Crore and gross debt sold stood at Rs 208.60 Crore. Therefore, the net investment of equity and debt reported were Rs 1,036.00 Crore and Rs (110.10) Crore respectively.

On Thursday, Indian Rupee closed at 48.91/92 per dollar, marginally stronger than its previous close at 48.93/94. Despite dollar demand from refineries and importers domestic currency managed to gain marginally as dollar weakened against other currencies in international market.

On BSE, total number of shares traded were 54.04 Crore and total turnover stood at Rs 6,581.02 Crore. On NSE, total number of shares traded were 110.08 Crore and total turnover was Rs 20,781.78 Crore.

Top traded volumes on NSE Nifty – Unitech with total volume traded 58942361 shares, followed by Suzlon Energy with 29441538, Tata Steel with 17018692, Hindalco with 6427171 and Reliance Capital with 6166674 shares.

On NSE Future and Options, total number of contracts traded in index futures was 777984 with a total turnover of Rs 17,637.68 Crore. Along with this total number of contracts traded in stock futures were 976445 with a total turnover of Rs 30,574.28 crore. Total numbers of contracts for index options were 1766,938 with a total turnover of Rs 41485.62 Crore and total numbers of contracts for stock options were 66782 and notional turnover was Rs 2,112 Crore.

Today, Nifty would have a support at 4,602 and resistance at 4,712 and BSE Sensex has support at 15,625 and resistance at 15,865