Pre Session Commentary - Oct 16 2009

Today domestic markets are likely to open negative as Asian markets are trading lower with modest losses and US market also closed low. Along with this, SGX Nifty is also trading down, that will impact our market as well. Stocks and sector specific buying might lift the market up with marginal gains. Strengthening rupee will result in some downside in IT stocks. On could expect volatility throughout the session in a narrow range that would also bring some profit booking pressure as well. Today domestic markets are likely to trade range bound with negative bias.

On Thursday, domestic market paused after two consecutive sessions of robust rally, closing near to flat on negative side, amid by strengthening rupee against major currencies and fall in European markets after positive opening. On the broader prospect, rupee has narrowed exporter’s margins mainly IT, Textile and James & Jewellery sectors. Intraday volatility was high. The market pared gains soon after an initial upside triggered by a strong rally in US stocks on Wednesday. The market slumped in afternoon trade with the Sensex hitting a fresh intraday low. Stock and sector specific buying pulled the markets above the base line but that was short lived. Wholesale price Index rose 0.92% in 12 months to 3 Oct’09, slightly higher than previous week''s annual rise of 0.7%. Within the WPI, the food articles index rose 13.34%. From the sectoral front, investors’ on-loaded and off-loaded position across the board, resulting in a mixed indication. Major sectors that spurted includes Metal, Bankex, Power and PSU stocks gaining 1.72%, 1.58%, 0.49% and 0.47% respectively among others. However, Teck, IT, Pharma and Consumer Durable Indices witnessed most of the selling pressure.

The BSE Sensex marginally lower by 35.91 points or 0.21% at 17,195.20 and NSE Nifty ended slightly down by 9.35 points or 0.18% at 5,108.85. BSE Mid Caps and Small Caps closed with gains 36 and 65.88 points at 6,539.23 and 7,630.13 respectively. The BSE Sensex touched intraday high of 17,350.39 and intraday low of 17,092.83.

On Thursday, the US stock market closed higher amid by extensive buying in Energy sphere that helped the broader market finish at session highs by overshadowing losses that stemmed from set of quarterly reports from Goldman Sachs and Citigroup. The key benchmark Indices spend most of the session with modest losses, which specifically came from financial sector. Financial sector was down as much as 1.7% following better-than-expected results from Goldman Sachs and Citigroup. Investors were put out by the latest set of economic data, which featured 0.2% rise in consumer prices and 0.1% increase in core consumer price for September. Initial jobless claims for the week ending Oct 10, 2009 totaled 514,000, which was a marginally below the consensus estimate of 520,000 initial claims and down 10,000 from the previous week. Continuing claims slipped lower 6.0 million for the first time since March by coming in at 5.99 million. Heavy buying was seen across the secotors. Energy, Utilities, Consumer Staples and Telecom were the major leaders of the day with respective gains of 2.0%, 0.9%, 0.8% and 0.7% respectively. However, Financials was the lone loser with loss of 0.7%. US light crude oil futures for November delivery closed 3.2% higher at $77.58 per barrel, on the New York Mercantile Exchange. Crude oil futures are now up almost 130% since lows hit in February.

The Dow Jones Industrial Average (DJIA) ended with modest gain of 47.08 points at 10,062.94. NASDAQ index improved 1.06 points to 2,173.29 and the S&P 500 (SPX) closed higher by 4.54 points at 1,096.56.

Indian ADRs ended mixed on Thursday. In the telecom space, MTNL was down 3.04% and Tata Communication was down 1%. In the banking space, ICICI Bank was down 0.02% while HDFC Bank was up 2.86%. In the IT space, Infosys was down 0.9%, while Satyam Computers was up 3.45%, Wipro was up 0.11% and Patni Computers was up 1.34%. In other sectors, Sterlite Industries was down 10.5%, Dr Reddy''s Labs was down 2.94% and Tata Motors was down 1.41%.

The FIIs on Thursday stood as net buyers in equity and debt. Gross equity purchased stood at Rs. 4,268.40 crore and gross debt purchased stood at Rs. 600.20 crore, while the gross equity sold stood at Rs. 2,685.90 crore and gross debt sold stood at Rs. 115.40 crore. Therefore, the net investment of equity and debt reported were Rs. 1,582.50 crore and Rs. 484.80 crore respectively.

On Thursday, the partially convertible rupee ended at 46.22/23 per dollar, 0.2% weaker than previous closing at 46.13/14 per dollar. As banks covered short dollar positions as euro slipped versus greenback. Some importers also bought the greenback. But, lower rates in NDF resulted in rise to arbitrage and restricted the fall.

On BSE, total number of shares traded were 60.86 crore and total turnover stood at Rs. 6,538.56 crore. On NSE, total number of shares traded were 103.45 crore and total turnover was Rs 20,025.41 crore.

Top traded volumes on NSE Nifty – Unitech Ltd with total volume traded 50325929 shares, followed by Suzlon Energy with 42272941, Bharti Airtel with 22490700, Reliance Communication with 18611058, Idea Cellular with 12135004 and Hindalco Industries with 10807125 shares.

On NSE Future and Options, total number of contracts traded in index futures was 580874 with a total turnover of Rs. 14,355.43 crore. Along with this total number of contracts traded in stock futures were 679923 with a total turnover of Rs. 23,224.13 crore. Total numbers of contracts for index options were 1236237 with a total turnover of Rs. 31,564.74 crore and total numbers of contracts for stock options were 73661 and total turnover was Rs 2,467.23 crore.

Today, Nifty would have a support at 5,018 and resistance at 5,090 and BSE Sensex has support at 17,080 and resistance at 17,230.