Pre Session Commentary - Aug 31 2009

Today domestic markets are likely to have gap down opening, as Asian markets are trading in deep red and the US stocks closed mixed on Friday. Consequently, there is lack of specific cue from the global market to lift the sentiments in domestic bourses. Meanwhile, in domestic arena investors will eye on the Central Statistical Organization’s data on India''s gross domestic production due to come out today (31st August 2009). Moreover, the market may consolidate after rise during the last week. The domestic markets are likely to trade volatile today.

On Friday, the Indian market made smart recovery from day’s low to close with handsome gains due to fresh buying momentum that emerged during late hours. All round buying contributed to the sharp rebound backed by strong cue from European markets. Positive US index futures also added to the northward journey. Benchmark indices were higher in early trade also on resurgence of monsoon rains. According to the Meteorological Department, monsoon rains were 5% below average in the week to 26 August 2009, which is close to the normal. However, market turned weak during afternoon tracking weakness in Chinese stocks. The BSE Sensex ended above 15,900 level and NSE Nifty closed above 4,700 mark after hitting a new 52-week high of 4,743.

The BSE Sensex higher by 141.27 points or (0.90%) at 15,922.34 and NSE Nifty ended up by 44.15 points or (0.94%) at 4,732.35. BSE Mid Caps and Small Caps closed with gains of 41.20 and 54.70 points at 5,863.70 and 6,961.76 respectively. The BSE Sensex touched intraday high of 15,957.67 and intraday low of 15,663.35.

On Friday, US stock markets closed mixed. The day started with better than expected earnings announcement from key tech players like Dell, Marvell Tech and Intel. Dell reported better than expected earnings of $0.28 per share, followed by Marvell that also reported better than expected earnings of $0.18 per share. Semiconductor Company Intel came out with an increased revenue forecast of $9 billion for the current quarter, which is much higher than $8.5 billion forecasted by analysts. These announcements helped major indices touch new highs for 2009, however it could not last longer amidst profit booking pressures. The investors were of the belief that markets have already accounted for such earnings announcement from corporate. US light crude oil futures for October delivery closed at $72.75 per barrel up by 0.4% on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed lower by 36.43 points at 9,544.20, NASDAQ index closed flat at 2,028.77 and the S&P 500 (SPX) also closed flat at 1,028.93.

Today major stock markets in Asia are trading in deep red. Hang Seng is trading down by 440.33 points at 19,658.29 followed by Shanghai Composite which is trading lower by 153 points at 2,707.68. Furtherr, Japan’s Nikkei is trading lower by 36.95 points at 10,497.19. Taiwan Weighted is also down by 44.68 points at 6,765.18. Strait Times is lower by 28.92 points at 2,613.88 and Seoul Composite is down by 24.67 points at 1,583.27.

Indian ADR''s ended mixed on Friday. In the telecom pack, Tata Comm was down 0.33% and MTNL was high by 1.56%. In the banking space, ICICI Bank was low 1.21% but HDFC Bank was up 1.63%. In the IT sector, Infosys was low 1.32%, Wipro was low 1.67%, while Patni was down 0.57% and Satyam was up 0.55%. In the other space, Dr Reddys was up 0.06%, Tata Motors and Sterlite were down by 0.08% and 0.50% respectively.

The FIIs on Friday stood as net buyers in equity and net sellers in debt. Gross equity purchased stood at Rs 4,109.60 Crore and gross debt purchased stood at Rs 205.60 Crore, while the gross equity sold stood at Rs 2,766.80 Crore and gross debt sold stood at Rs 3,008.00 Crore. Therefore, the net investment of equity and debt reported were Rs 1,342.80 Crore and Rs (2,802.50) Crore respectively.

On Friday, Indian Rupee closed at 48.65/66 per dollar, 0.71% stronger than its previous close at 48.91/92. Phenomenal surge in local stock markets at the end helped strengthen the local currency.

On BSE, total number of shares traded were 53.20 Crore and total turnover stood at Rs 6,581.27 Crore. On NSE, total number of shares traded were 101.22 Crore and total turnover was Rs 18,360.00 Crore.

Top traded volumes on NSE Nifty – Unitech with total volume traded 104157667 shares, followed by Suzlon Energy with 38138094, Tata Steel with 15833142, DLF with 15079403 and Bharti Airtel with 10555261 shares.

On NSE Future and Options, total number of contracts traded in index futures was 705211 with a total turnover of Rs 15,554.78 Crore. Along with this total number of contracts traded in stock futures were 586790 with a total turnover of Rs 18,537.62 crore. Total numbers of contracts for index options were 1029361 with a total turnover of Rs 24,397.39 Crore and total numbers of contracts for stock options were 48310 and notional turnover was Rs 1,619.27 Crore.

Today, Nifty would have a support at 4,624 and resistance at 4,804 and BSE Sensex has support at 15,560 and resistance at 16,178.