Pre Session Commentary - Oct 1 2009

Today domestic markets are likely to open negative as majority of Asian markets have opened in red. On the other hand US markets also closed will moderate losses as Chicago purchasing manager’s index dropped to 46.10 in the month of September as compared to 50 in August. The sentiments across the broader level looked strong during yesterday’s trade and therefore one could anticipate some consolidation happening at this level. The domestic markets are likely to trade range bound today.

On Wednesday, Indian market extended its initial gains to close sharply higher on sustained buying over the ground led by hopes that quarterly earnings would top expectations. The BSE Sensex hit its highest level in more than 16 months, as broke 17,000 level during the trading and ended above 17,100 level. Besides, NSE Nifty also touched its highest level in more than 16 months and closed above 5,050 mark. Stocks hit fresh high on rise in the index of six core sector industries that stood at 255.3 in August 2009, with a growth of 7.1% as compared to a growth of 2.1% in August 2008. The index of six sectors has a combined weight of 26.7% in the Index of Industrial Production (IIP). Further, stocks raised also on positive European markets and higher US index futures. However, volume on the exchange was low, as investors opted to remain on sidelines on shortened trading week. The market will remain close on Friday, 2 October 2009, on account of Gandhi Jayanti.

The BSE Sensex closed higher by 273.93 or (1.63%) points at 17,126.84 and NSE Nifty ended up by 77.10 points or (1.54%) at 5,083.95. BSE Mid Caps and Small Caps closed with gains of 59.36 and 70.45 points at 6,324.16 and 7,590.04 respectively. The BSE Sensex touched intraday high of 17,142.52 and intraday low of 16,868.46.

On Wednesday, the US stock market closed modestly lower backed by mixed economic data. A report that showed the Chicago purchasing-manager''s index dropped to 46.1 in September from 50 in August indicating a contraction, weighed on sentiments. Besides, a disappointing jobs report also contributed to downturn. Meanwhile, there was some positive news also, which helped stocks minimize losses. The economy constricted at a 0.7% rate in the second quarter, which was less than the expected decline of 1% plus. In addition, most recent batch of earnings proved better than expected. Consequently, Nike closed with gain of 4.61% and Jabil Circuit advanced by 1.13%. Materials stocks had provided headship as commodities prices soared and Tech stocks also supported the market. In economic news, ADP said private employers slashed 254,000 jobs from their payrolls in September, which is more than expected but less than the revised 277,000 loss recorded in August. US light crude oil futures for November delivery closed up by 5.7% at $70.49 per barrel, on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) dropped by 29.92 points at 9,712.28. Going ahead, NASDAQ index slightly down by 1.62 points to 2,122.42 and the S&P 500 (SPX) closed marginally lower by 3.53 points at 1,057.08.

Indian ADRs ended in green on Wednesday. In the banking space, ICICI Bank was up 6.11% and HDFC Bank was up 3.06%. In the telecom space, Tata Communication was up 2.74% and MTNL was up 0.81%. In the IT space, Wipro was up 2.87%, Infosys was up 0.71%, Patni Computers was up 0.76%. However, Satyam Computers, which was the sole loser among the ADRs, was down 1.2%. In other sectors, Sterlite Industries was up 1.85%, Tata Motors was up 1.09% and Dr Reddy''s Labs was up 1.3%.

The FIIs on Wednesday stood as net buyers in equity and net sellers in debt. Gross equity purchased stood at Rs 3,702.90 Crore and gross debt purchased stood at Rs 298.90 Crore, while the gross equity sold stood at Rs 2,600.40 Crore and gross debt sold stood at Rs 352.40 Crore. Therefore, the net investment of equity and debt reported were Rs 1,102.50 Crore and Rs (53.50) Crore respectively.

On BSE, total number of shares traded were 48.31 Crore and total turnover stood at Rs 6,668.92 Crore. On NSE, total number of shares traded were 85.51 Crore and total turnover was Rs 20,178.57 Crore.

On NSE Future and Options, total number of contracts traded in index futures was 477912 with a total turnover of Rs 11,816.64 Crore. Along with this total number of contracts traded in stock futures were 505409 with a total turnover of Rs 17,587.48 crore. Total numbers of contracts for index options were 974698 with a total turnover of Rs 24,539.40 Crore and total numbers of contracts for stock options were 42106 and notional turnover was Rs 1,469.30 Crore.

Today, Nifty would have a support at 4,990 and resistance at 5,110 and BSE Sensex has support at 16,844 and resistance at 17,232.