Pre Session Commentary - Oct 15 2009

oday domestic markets are likely to open strong as Asian markets are trading higher with strong gains. Along with this, SGX Nifty is also trading higher, that will aid our market as well. Stocks and sector specific buying will rule the market in a narrow range. Continued weakness in the US dollar will result in some downside in IT stocks. On could expect volatility in the latter trading hour that would also bring some profit booking pressure as well. Today domestic markets are likely to trade range bound with positive bias.

On Wednesday, domestic market surged for the second day in a row amid by rally in global stocks, strong response to the initial public offer of Indiabulls Power, better-than-expected Q2 results from HDFC and robust Q2 results from HDFC Bank, spurted the bourses. Market touched 17 month highs during the trade with BSE Sensex ended above 17,200 level along with NSE Nifty closed above 5,100 level. A rally in US index futures triggered by a strong guidance from chip major Intel, aided the rally on the domestic bourses. Meanwhile, C Rangarajan, chairman of the prime minister’s Economic Advisory Council stated that the Reserve Bank of India (RBI) is doubtful to revise standard interest rates when it reviews monetary policy later this month. However, the RBI holds its quarterly policy review on October 27. Additionally, he said that India’s economy would grow 6-6.5% with an upward bias in the year to March 31, 2010. From the sectoral front, investors’ on-loaded position across the sectors. Major sectors that spurted includes Metal, CG, Auto and PSU stocks gaining 5.27%, 2.38%, 2.28% and 1.68% respectively among others. However, Teck Index was the lone sector under pressure.

The BSE Sensex closed higher by 204.44 points or 1.20% at 17,231.11 and NSE Nifty ended up by 63.95 points or 1.27% at 5,118.20. BSE Mid Caps and Small Caps closed with gains 124.77 and 114.91 points at 6,503.23 and 7,564.25 respectively. The BSE Sensex touched intraday high of 17,274.59 and intraday low of 17,117.90.

On Wednesday, the US stock market closed spectacularly higher amid by strong set of earnings from couple of industry bellwethers and continued weakness in US dollar against major currencies. This pumped in fresh capital into the market that sent all three major indices to new 2009 highs. Intel and JPMorgan beating market expectation when they released their third quarter earnings. Intel brought in $0.33 per share and also issued upside revenue guidance. On the other hand JPMorgan brought in $0.83 per share for its latest quarter. Pleasing September retail sales data, which showed a softer-than-expected decline of 1.5%. Barring autos, retail sales increased a better-than-expected 0.5%. After touching a new all time high at $1,072 per ounce in the overnight trade, the December gold futures closed down fractionally at $1064.60 per ounce. Heavy buying was seen across the secotors. Financial, Industrials, Materials and Energy were the major leaders of the day with respective gains of 3.4%, 2.6%, 2.0% and 1.2% respectively. However, Telecom was neutral. US light crude oil futures for November delivery closed 1.3% higher at $75.15 per barrel, on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) ended with spectacular gain of 144.80 points at 10,015.86. NASDAQ index surged 32.34 points to 2,172.23 and the S&P 500 (SPX) closed higher by 18.83 points at 1,092.02.

Indian ADRs ended in green on Wednesday. In the IT space, Wipro was up 3.64%, Infosys was up 2.77%, Satyam Computers was up 1.92% and Patni Computers was up 2.69%. In the banking space, ICICI Bank was up 2.96% and HDFC Bank was up 2.9%. In the telecom space, MTNL was up 2.26% while Tata Communication ended down 0.33%. In other sectors, Sterlite Industries was up 7.9%, Tata Motors was up 6.41% and Dr Reddy''s Labs was up 3.02%.

The FIIs on Wednesday stood as net buyers in equity and debt. Gross equity purchased stood at Rs. 3,058.90 crore and gross debt purchased stood at Rs. 929.80 crore, while the gross equity sold stood at Rs. 2,059.90 crore and gross debt sold stood at Rs. 826.40 crore. Therefore, the net investment of equity and debt reported were Rs. 999.00 crore and Rs. 103.50 crore respectively.

On Wednesday, the partially convertible rupee ended at 46.15/16 per dollar, 0.8% stronger than previous closing at 46.48/49 per dollar. As the dollar''s fall to 14-month lows versus a basket of currencies boosted sentiment, added by the strong rally in financial market that could trigger more capital inflows.

On BSE, total number of shares traded were 50.71 crore and total turnover stood at Rs. 6,895.34 crore. On NSE, total number of shares traded were 94.29 crore and total turnover was Rs 20,330.01 crore.

Top traded volumes on NSE Nifty – Unitech Ltd with total volume traded 41474397 shares, followed by Bharti Airtel with 27238676, Suzlon Energy with 20802384, Reliance Communication with 19179179, Hindalco Industries with 13607425 and Jindal steel with 9199007 shares.

On NSE Future and Options, total number of contracts traded in index futures was 485672 with a total turnover of Rs. 11,980.93 crore. Along with this total number of contracts traded in stock futures were 673496 with a total turnover of Rs. 23,321.61 crore. Total numbers of contracts for index options were 1106194 with a total turnover of Rs. 28,113.12 crore and total numbers of contracts for stock options were 74523 and total turnover was Rs 2,537.82 crore.

Today, Nifty would have a support at 5,018 and resistance at 5,120 and BSE Sensex has support at 16,980 and resistance at 17,300.