Pre Session Commentary - Sep 2 2009

Today domestic markets are likely to open negative as majority of Asian markets have opened with blood bath on the back of weak cues from over night selling pressure in US markets. Despite some good ISM manufacturing data in US coupled with remarkable pending home sales data for the month of August and July respectively, selling pressure erupted across broader level in US. The participants across the globe are well abreast with the over valuation of stocks and therefore resulting some correction at peak levels. In the domestic arena the day’s trade is likely to be negative.

On Tuesday, domestic market pared all its initial gains to close the day on downbeat note on sustained selling pressure witnessed in key stocks. Market turned southward and continued to extend losses tracking lower European markets along with weak US index futures that led selling pressure in the domestic bourses. However, market was firm during the early trading as the Asian stocks were higher on strong Chinese manufacturing sector data. The China’s Purchasing Managers’ Index increased to a seasonally adjusted 54 in August from 53.3 in July. India’s export declined by 28.4% in July as against the same month last year. The BSE Sensex ended below 15,600 level and NSE Nifty closed below 4,650 mark.

The BSE Sensex closed lower by 115.45 points or (0.74%) at 15,551.19 and NSE Nifty ended down by 36.75 points or (0.79%) at 4,625.35. BSE Mid Caps and Small Caps closed with losses of 85.48 and 105.86 points at 5,797.49 and 6,891.17 respectively. The BSE Sensex touched intraday high of 15,923.09 and intraday low of 15,475.28.

On Tuesday, US stock markets closed negative. Despite good macro economic data the markets slipped into red due to overselling in financial space. There are sentiments in the markets that good economic data news have been already priced in stocks at broader level and therefore any upward movement is less likely. ISM Manufacturing Index for August recorded at 52.9, which is better than the expected 50.5, but it marked the first time the reading topped 50 since January 2008. The pending home sales data for July surged a remarkable 3.2% as against 1.5% increase that was widely expected and also marked the sixth consecutive month-over-month increase for the tally. Construction spending in July fell by 0.2% month-over-month, which was below the consensus call for 0% growth, but the report didn''t receive much attention. US light crude oil futures for October delivery closed at $68.05 per barrel down by 2.7% on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed lower by 185.61 points at 9,310.60, NASDAQ index closed lower by 40.17 points at 1,968.89 and the S&P 500 (SPX) also closed lower by 22.58 points at 998.04.

Today the major stock markets in Asia opened with blood bath. The Shanghai Composite is trading high by 14.45 at 2,698.175, Hang Seng is lower by 361.66 points at 19,510.64. Further Japan''s Nikkei is low by 299.69 points at 10,230.37. Taiwan Weighted is up by 5.78 points at 6,966.18.

The FIIs on Tuesday stood as net sellers in equity and net buyers debt. Gross equity purchased stood at Rs 2,673.90 Crore and gross debt purchased stood at Rs 414.50 Crore, while the gross equity sold stood at Rs 2,760.10 Crore and gross debt sold stood at Rs 92.00 Crore. Therefore, the net investment of equity and debt reported were Rs (86.20) Crore and Rs 322.40 Crore respectively.

On Tuesday, Indian Rupee closed at 49.05/06 per dollar, 0.4% weaker than its previous close at 48.83/84. The local currency lost strength due late correction in local stock market.

On BSE, total number of shares traded were 75.96 Crore and total turnover stood at Rs 7,547.38 Crore. On NSE, total number of shares traded were 161.93 Crore and total turnover was Rs 21,900.91 Crore.

Top traded volumes on NSE Nifty – Unitech with total volume traded 99390488 shares, followed by Suzlon Energy with 91618506, DLF with 15551621, Tata Motors with 11924392 and Tata Steel with 10560515 shares.

On NSE Future and Options, total number of contracts traded in index futures was 933805 with a total turnover of Rs 20,520.67 Crore. Along with this total number of contracts traded in stock futures were 658317 with a total turnover of Rs 21,226.35 crore. Total numbers of contracts for index options were 1296087 with a total turnover of Rs 30,663.65 Crore and total numbers of contracts for stock options were 60622 and notional turnover was Rs 2,075.61 Crore.

Today, Nifty would have a support at 4,544 and resistance at 4,665 and BSE Sensex has support at 15,236 and resistance at 15,598