Pre Session Commentary - Aug 3 2009

Today domestic markets are likely to open positive as majority of Asian markets have opened in the positive territory. There are positive sentiments across the world markets as US second quarter GDP has contracted only by -1.0%, far better than expected -1.5% and -6.4% recorded during the first quarter. In the domestic arena benchmark indices are already at there peak level of 2009 and therefore profit booking pressures may hamper a lot of frontline stocks. There could be a range bound trade during the day’s session.

On Friday, domestic markets closed higher. The market opened with strong gains and kept on marching forward till the mid session however, selective profit booking in the late after noon trade led the market to shed most of its gains tracking the weakness in the European markets. Firmness came on last hour trading after substantial buying in index heavyweights like Hindalco, Tata Motors, ONGC and SBI that closed more than 5% each. The speculators took fresh positions on the first day of the August future and option series. World equity funds gathered $9.5 billion in the week ending 29 July 2009, as per global fund tracker EPFR Global, highest since June 2008. BRIC (Brazil, Russia, India and China) equity funds seeing net inflows for a 19th consecutive week. India equity funds took in a year-to-date high of $211 million in the most recent week, while China and Greater China stock funds reported $711 million in fresh money. The BSE Sensex ended above15,350 level and NSE Nifty closed above 4,550 mark.

The BSE Sensex closed higher by 282.35 points or (1.83%) at 15,670.31 and NSE Nifty ended up by 65 points or (1.42%) at 4,636.45. BSE Mid Caps and Small Caps closed with gains 64.62 and 1.82 points at 5,571.02 and 6,205.83 respectively. The BSE Sensex touched intraday high of 15,732.81 and intraday low of 15,449.47.

On Friday, the US stock markets closed mixed. The Q2 GDP reading was a major event before the markets opened. The advance Q2 GDP reported a contraction of -1.0%, marking the fourth consecutive quarter of decline. However the contraction was better than the expected -1.5% decline and also downwardly revised -6.4% (from -5.5%) in the first quarter. On the other hand another major economic indicator called Personal Consumption, which accounts major chunk of US GDP reported a worst than expected fall of -1.2% as against the estimated -0.5%. In sector specific, Materials took the lead with a gain of 0.9% as commodity prices rose, whereas Utilities sector underperformed with a loss of 1.1%. After a range bound trading the markets closed nearly unchanged. US light crude oil futures for September delivery closed at $69.34 per barrel up by 3.6% on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed higher by 17.15 points at 9,171.61, NASDAQ index declined by 5.80 points to 1,978.50 and the S&P 500 (SPX) closed flat at 987.48.

Today major stock markets in Asia are trading positive. Hang Seng is up by 92.61 points at 20,665.94. Shanghai Composite is up by 13.22 points at 3,425.29. Japan''s Nikkei is trading low by 28.51 points at 10,328.32. Strait Times is low by 6.69 points at 2,652.51.

Indian ADRs ended mixed on Friday. In the banking space, ICICI Bank was up 0.93% and HDFC Bank was up 1.68%. In the telecom space, Tata Communication was down 4.68% and MTNL was also low by 3.66%. In the IT space, Satyam Computers was low by 2.33%, Infosys was up 1.94%, Wipro was up 0.90% and Patni Computers was up 2.35%. In other sectors, Sterlite Industries was flat, Tata Motors was up 0.67% and Dr Reddy''s Labs was low by 0.59%.

The FIIs on Friday stood as net buyers in equity and net sellers in debt. Gross equity purchased stood at Rs 5,071.20 Crore, while the gross equity sold stood at Rs 3,887.20 Crore and gross debt purchased stood at Rs 204.10 Crore, while gross debt sold stood at Rs 2,500.30 Crore. The net investment of equity reported was Rs 1,184.00 Crore and net debt was Rs (2,296.20) Crore.

On Friday, the partially convertible rupee ended at Rs 47.49/50, 1.92% stronger than its previous close at 48.42/43. The rupee gained strength on the back of phenomenal firm trend in local stock markets.

On BSE, total number of shares traded were 43.20 Crore and total turnover stood at Rs 6,292.49 Crore. On NSE, total number of shares traded were 95.09 Crore and total turnover was Rs 19,926.93 Crore.

Top traded volumes on NSE Nifty – Unitech with total volume traded 64945636 shares, followed by Suzlon Energy with 48848405, Hindalco with 19802427, DLF with 14815854 and Tata Steel with 12756154 shares.

On NSE Future and Options, total number of contracts traded in index futures was 687808 with a total turnover of Rs 1,5193.7 Crore. Along with this total number of contracts traded in stock futures were 618324 with a total turnover of Rs 19,288.37 crore. Total numbers of contracts for index options were 904949 with a total turnover of Rs 21,271.51 Crore and total numbers of contracts for stock options were 43547 and notional turnover was Rs 1,397.65 Crore.

Today, Nifty would have a support at 4,598 and resistance at 4,696 and BSE Sensex has support at 15,612 and resistance at 15,725.