Pre Session Commentary - Aug 4 2009

Today domestic markets are likely to open positive on the back of phenomenal US economic data that has brought euphoria across Asian markets. The US ISM Manufacturing Index reported its seventh straight increase by coming at 48.9 for the month of June. Further the Consumer spending data for the month of June made a surprise gain of 0.3% raising hopes of economy recovery. In the domestic arena one could witness Sensex breaching the 17k mark and Nifty50 touch the 4800 mark. During the day’s trade there would be a broad based buying across the broader markets.

On Monday, domestic markets closed higher. Market opened on upbeat note tracking other Asian markets. However, the US stocks markets ended in mixed on Friday after government report showed softness in consumer spending. The major indices remained in green for most of the session and settled near the unchanged mark after the Q2 GDP showed a less than expected contraction. Further, Indian benchmark turned volatile soon after start on some profit booking at higher level. Market continued to swing between positive and negative terrain till afternoon trade. A government data that showed fall in exports by 27.7% in June, weigh on sentiments. However, stocks managed to recover and witnessed firm trade with higher European markets and firm US index futures. Market reported sharp gains during last trading hours to close near day’s high. From the sectoral front, Auto, Realty, Metal, Power, Oil & Gas, Capital Goods and Pharma stocks contributed to the positive sentiments. Good buying was also seen in BSE Mid Cap and BSE Small Cap indices. However, Consumer Durables and FMCG stocks observed most of the selling from these baskets.

The BSE Sensex closed higher by 253.92 points or (1.62%) at 15,924.23 and NSE Nifty ended up by 74.95 points or (1.62%) at 4,711.40. BSE Mid Caps and Small Caps closed with gains 131.56 and 107.95 points at 5,702.58 and 6,313.78 respectively. The BSE Sensex touched intraday high of 15,963.36 and intraday low of 15,608.40.

On Monday, the US stock markets closed higher. Broad based buying on the back of better than expected economic data helped S&P to reach its fresh psychologically significant 1000 mark. The ISM Manufacturing Index made its seventh straight increase by coming in at 48.9 for June, however the sub-50 reading still exudes contraction in the manufacturing sector, the reading was still better than what had been expected. Construction spending data for June made a surprise 0.3% increase. It was expected to fall 0.5%. The overwhelming economic data also helped commodity prices spiral. CRB commodity index gained by 3.4% and is now more than 9% during the past three sessions. Energy stocks also rallied with a gain of 2.3%. US light crude oil futures for September delivery closed at $71.53 per barrel up by 3.0% on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed higher by 114.95 points at 9,286.56, NASDAQ index inclined by 30.11 points to 2,008.61 and the S&P 500 (SPX) closed higher by 15.15 points at 1,002.61.

Indian ADRs rallied on Monday. In the IT space, Satyam Computers was up 7.14%, Infosys was up 3.14%, Wipro was up 4.13% and Patni Computers was up 1.11%. In the banking space, ICICI Bank was up 5.9% and HDFC Bank was up 3.44%. In the telecom space, MTNL was up 4.28% and Tata Communication was up 3.53%. In other sectors, Sterlite Industries was up 8.23%, Tata Motors was up 7.2% and Dr Reddy''s Labs was up 2.27%.

The FIIs on Monday stood as net buyers in equity. Gross equity purchased stood at Rs 3,079.80 Crore, while the gross equity sold stood at Rs 2,292.20 Crore and gross debt purchased stood at Rs 0.00 Crore, while gross debt sold stood at Rs 0.00 Crore. The net investment of equity reported was Rs 787.60 Crore and net debt was Rs 0.00 Crore.

On Monday, the partially convertible rupee ended at Rs 47.64/65, 0.63% stronger than its previous close at 47.49/50. The rupee gained strength on the back of phenomenal last hour rally in the local stock markets.

On BSE, total number of shares traded were 40.92 Crore and total turnover stood at Rs 5,623.69 Crore. On NSE, total number of shares traded were 86.00 Crore and total turnover was Rs 16,719.34 Crore.

Top traded volumes on NSE Nifty – Unitech with total volume traded 74322647 shares, followed by Suzlon Energy with 62182427, Hindalco with 22237601, DLF with 13840143 and Tata Steel with 11066283 shares.

On NSE Future and Options, total number of contracts traded in index futures was 552897 with a total turnover of Rs 1,2223.10 Crore. Along with this total number of contracts traded in stock futures were 551855 with a total turnover of Rs 17,782.46 crore. Total numbers of contracts for index options were 820194 with a total turnover of Rs 19,457.31 Crore and total numbers of contracts for stock options were 39943 and notional turnover was Rs 1,342.30 Crore.

Today, Nifty would have a support at 4,765 and resistance at 4,809 and BSE Sensex has support at 16,056 and resistance at 16,235.