Pre Session Commentary - Oct 20 2009

Today domestic markets are likely to open positive amid by strong start in Asian Market, robust rally in US Market overnight and strong trade of SGX Nifty. The session would be followed by volatility in a narrow range. One could expect fresh buying in IT, Metals and Banking sphere. Sector and stocks specific buying could help the broader market to make an upward move. Today domestic market is likely to trade range bound with positive bias.

For Muhurat trading, the market closed on a flat note after strong start. The Markets pared early gains on account of profit booking pressure on frontline stocks and negative sentiments across US markets as Bank of America reported dismal set of numbers. Banks are seen reporting a sedate growth in core lending amid sluggish credit offtake. However, better than expected Q2 results of TCS provided some support to bourses but that was short lived. According to fund tracker EPFR Global-Emerging-market equity fund inflows surged in the second week of October 2009 on optimism improving US earnings and China''s trade figures signal increased demand for commodities. Extensive inflows were seen in funds specialized in BRIC countries - Brazil, Russia, India and China. Asia ex-Japan funds received $823 million in the week ended 14 October 2009. CD, Teck, Metals and IT Indices were major gainers with gains of 0.71%, 0.69%, 0.65% and 0.39% respectively whereas Banking, FMCG, Realty and CG were losers with loss of 0.30%, 0.09%, 0.04% and 0.01% respectively.

The BSE Sensex closed higher by 3.19 points or 0.02% at 17,326.01 and NSE Nifty declined 0.35 points or 0.01% at 5,141.80. BSE Mid Caps and Small Caps closed with gains 43.07 and 104.12 points at 6,651.56 and 7,771.12 respectively. The BSE Sensex touched intraday high of 17,493.17 and intraday low of 17,260.66.

On Monday, the US stock market closed higher amid by broad-based buying in stocks.
Strong global cues shrugged positive tone for participants in the early trade, but weakness in the financial sector quickly swipes away the broad market’s opening gains. Regional banks were the major draggers for the financial sector. BB&T released better-than-expected earnings of $0.23 per share. However, broad-based purchase pushed all three major indices to new highs for the year. Further, S&P 500 weren''t able to push through the psychologically 1100 level, but they didn''t roll over after being rebuffed, either. Meanwhile, material stocks spurted from both broader market interest and higher commodity prices, which pushed the CRB Commodity Index to fresh high for the year. Weakening dollar benefited commodities as well as stocks this session. The greenback slipped 0.3% against a basket of major foreign currencies this session. That pushed the Dollar Index marginally above its 12-month lows. US light crude oil futures for November delivery closed up 1.2 % at $79.44 per barrel, on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) ended with gain of 96.28 points at 10,092.19. NASDAQ index spurted 19.52 points to 2,176.32 and the S&P 500 (SPX) closed higher by 10.23 points at 1,097.91.

The Indian ADR was ended mostly higher yesterday. In the IT space, Infosys was up 0.78%, Wipro was up 2.51%, Patni was up 1.91%, while Satyam was down 1.54%. In the banking sector, ICICI Bank was up 1.80% and HDFC Bank was up 1.65%. In the telecom pack, Tata Comm was up 1.56% and MTNL was up 3.24%. In the other sectors, Sterlite was up 1.12%, Tata Motors was up 0.65%, while Dr Reddys was up 0.54%.

The FIIs on Friday stood as net buyers in equity and debt. Gross equity purchased stood at Rs. 3,924.20 crore and gross debt purchased stood at Rs. 1,173.20 crore, while the gross equity sold stood at Rs. 2,961.10 crore and gross debt sold stood at Rs. 81.70 crore. Therefore, the net investment of equity and debt reported were Rs. 963.10 crore and Rs 1,091.50 crore respectively.

On Friday, the partially convertible rupee ended at 46.29/30 per dollar, 0.13% weaker than previous closing at 46.23/24 per dollar. The rally in rupee was paused by demand for the U.S. unit from importers and oil refiners, but sharper losses were limited by gains in the local share market and managed to post its sixth straight weekly rise.

On BSE, total number of shares traded were 17.32 crore and total turnover stood at Rs. 1,735.55 crore. On NSE, total number of shares traded were 21.06 crore and total turnover was Rs. 3,806.11 crore.

Top traded volumes on NSE Nifty – Unitech with total volume traded 7340406 shares, followed by Suzlon Energy with 4727915, Bharti Airtel with 4316320, DLF with 3846607 and Reliance Communication with 3583253 shares.

On NSE Future and Options, total number of contracts traded in index futures was 100323 with a total turnover of Rs. 2,502.63 crore. Along with this total number of contracts traded in stock futures were 156963 with a total turnover of Rs. 5,324.65 crore. Total numbers of contracts for index options were 192470 with a total turnover of Rs. 4,931.86 crore and total numbers of contracts for stock options were 14532 and notional turnover was Rs. 491.19 crore.

Today, Nifty would have a support at 5,134 and resistance at 5,192 and BSE Sensex has support at 17,263 and resistance at 17,398.