Pre Session Commentary - Sep 18 2009

Today domestic markets are likely to open negative as majority of Asian markets like Nikkei, Hang Seng and Strait times have opened with blood bath. There is selling pressure across the globe as US markets had pared some gains at high levels despite better than expected macro economic data. Today domestic markets are likely to trade negative.

On Thursday, the market erased most of its initial gains to end the volatile session on the flat note as profit booking emerged during the trading. Shares of Reliance Industries contributed to drag the market lower as it closed with loss of more than 4%. Investors took calculative steps on fears of rise in interest rates that over looked the RBI’s statement that the central bank will not hike interest rates before economic recovery will come on track. Fears of rise in rates surfaced on account of increasing inflationary pressure. India’s inflation came in at 0.12% in week ended 5th September 2009, as against -0.12% in the previous week. Earlier during initial trading, market exhibited gains on positive global cues as Asian market ended in with good gains and European markets were in green. However rally was brief and selling pressure lugged the domestic bourses. The BSE Sensex ended around 6,700 level and NSE Nifty closed around 4,960 mark.

The BSE Sensex closed marginally higher by 34.07 points at 16,711.11 and NSE Nifty ended slightly up by 7.15 points at 4,965.55. BSE Mid Caps and Small Caps closed with gains of 16.70 and 9.39 points at 6,143.62 and 7,317.50 respectively. The BSE Sensex touched intraday high of 16,820.02 and intraday low of 16,636.55.

On Thursday, US markets closed flat. Market participants finally broke the three consecutive gains to book some profits at higher level. Despite some profit booking pressures losses were contained and therefore major benchmark indices ended flat. At macro economic level, Philadelphia Fed Index for September showed that it hit a two-year high of 14.1, which was better than expected. Housing starts hit an annualized rate of 598,000, which was spot on with the consensus forecast. More impressive was that the August rate marked the best pace since November 2008. Building permits came in at an annualized rate of 579,000, which is just below the rate of 583,000 that was widely expected, but it still marked the best pace this year. In other economic news, initial jobless claims for the week ending Sept. 12 totaled 545,000. Though that marks an uncomfortable level of claims, it wasn''t as bad as the 557,000 initial claims that were expected. It also marked a drop of 12,000 from the previous week. Meanwhile, continuing claims climbed to 6.23 million from 6.10 million. Crude oil futures for the month of October delivery ended flat at $72.44 per barrel on New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) closed lower by 4.79 points at 9,783.92. NASDAQ index lost by 6.40 points at 2,126.75 and the S&P 500 (SPX) also declined by 3.27 points to close at 1,065.49 points.
Indian ADRs ended mixed on Thursday. In the banking space, ICICI Bank was down 2.99% and HDFC Bank was down 0.51%. In the telecom space, MTNL was up 0.8% and Tata Communication was up 1.34%. In the IT space, Satyam Computers was down 1.65%, while Infosys was up 1.26%, Wipro was up 1.91% and Patni Computers was up 2.83%. In other sectors, Sterlite Industries was down 2.54%, Tata Motors was down 0.15% while Dr Reddy''s Labs was up 0.58%.

The FIIs on Thursday stood as net buyers in equity and debt. Gross equity purchased stood at Rs 3,608.90 Crore and gross debt purchased stood at Rs 548.30 Crore, while the gross equity sold stood at Rs 2,435.00 Crore and gross debt sold stood at Rs 116.70 Crore. Therefore, the net investment of equity and debt reported were Rs 1,173.90 Crore and Rs 431.60 Crore respectively.

On Thursday, Indian Rupee closed at 48.15./16 per dollar, 0.17% stronger than its previous close at 48.23./24. Heavy capital inflow and also sustained weakness in green back against other international currencies helped the local currency gain strength.

On BSE, total number of shares traded were 59.32 Crore and total turnover stood at Rs 9,401.72 Crore. On NSE, total number of shares traded were 115.90 Crore and total turnover was Rs 24,159.70 Crore.

Top traded volumes on NSE Nifty – Unitech with total volume traded 52818047, followed by Suzlon Energy with 34674687, Hindalco with 26905479, Reliance with 16579451 and Tata Steel with 12448005 shares.

On NSE Future and Options, total number of contracts traded in index futures was 668696 with a total turnover of Rs 16,013.11 Crore. Along with this total number of contracts traded in stock futures were 834922 with a total turnover of Rs 27,737.41 crore. Total numbers of contracts for index options were 1499322 with a total turnover of Rs 37,088.55 Crore and total numbers of contracts for stock options were 85457 and notional turnover was Rs 2,923.59 Crore.

Today, Nifty would have a support at 4,902 and resistance at 4,975 and BSE Sensex has support at 16,610 and resistance at 16,796