Pre Session Commentary - Oct 21 2009

Today domestic markets are likely to open negative amid weak start in Asian Market and slide in US Market overnight. The trade would be choppy with negative bias but strong earning results from IT bewilders could push the bourses upward. One could expect selling pressure in Metals, Realty and Banking sphere in mid-trade. Today domestic market is likely to trade range bound with negative bias.

On Tuesday, the market closed lower on profit booking, erased most of its gains to end the volatile session on negative terrain. The market opened on pleasant note tracking firm cues from the global markets. The Asian markets were higher today and the US stock markets closed with gains on Monday on earnings optimism. Indian benchmark indices turned little volatile after start and slipped off from the early highs as traders booked profits at higher level. Stocks pared most of the gains after negative opening of European markets that contributed to the selling pressure. Market tried to recover during final trading, though was unable to sustain the momentum and slipped again to close in negative zone. Broad based selling was seen in majority of sectors Oil & Gas (1.70%), Consumer Durables (1.50%), Capital Goods (1.21%) and Power (0.69%). However, Realty (0.90%) and Metal (0.81%) stocks were in limelight, as witnessed most of the buying from these baskets. The Market breadth, indicating the overall strength of the market, was negative.

The BSE Sensex lower by 103 points or 0.59% at 17,223.01 and NSE Nifty ended down by 27.35 points or 0.53% at 5,114.35. BSE Mid Caps and Small Caps closed with gains of 3.93 and 11.75 points at 6,655.49 and 7,782.87 respectively. The BSE Sensex touched intraday high of 17,457.26 and intraday low of 17,185.04.

On Tuesday, the US stock market closed lower amid strengthening dollar and hard hit in basic material stocks and energy stocks, resulted a correction to commodity prices. The bourses started on positive side and extend the previous session’s gains but the tone was short lived as enthusiasm faded for the strong earnings of several widely held companies. Positive earnings surprises from Apple, Texas Instruments, Caterpillar, Pfizer and UnitedHealth couldn’t hold from slipping into negative terrain. On the economic side, the Producer Price Index for September made a blow month-over-month drop of 0.6%, while core producer prices made a surprise 0.1% slide. Housing starts for September came in at an annualized rate of 590,000, which is lower, the rate of 610,000 units that was much expected. US light crude oil futures for November delivery closed down 0.7 % at $79.09 per barrel, on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) ended with loss of 50.71 points at 10,041.48. NASDAQ index slipped 12.85 points to 2,163.47 and the S&P 500 (SPX) closed lower by 6.85 points at 1,091.06.

India ADR ended mixed yesterday. In the IT pack, Infosys was up 0.27%, Satyam was up 0.63%, while Wipro was down 0.42% and Patni was down 0.2%. In the telecom space, Tata Comm was down 0.96% but MTNL was up 3.42%. In the banking space, ICICI Bank was down 1.26% and HDFC Bank was down 2.60%. In the other space, Tata Motors slipped 0.33%, Sterlite was down 0.94% and Dr Reddys was down 1.43%.

The FIIs on Tuesday stood as net buyers in equity whereas net seller in debt. Gross equity purchased stood at Rs. 3,861.60 crore and gross debt purchased stood at Rs. 478.50 crore, while the gross equity sold stood at Rs. 2,664.90 crore and gross debt sold stood at Rs. 546.40 crore. Therefore, the net investment of equity and debt reported were Rs. 1,196.70 crore and Rs. (67.90) crore respectively.

On Tuesday, the partially convertible rupee ended at 46.11/12 per dollar, 0.39% stronger than previous closing at 46.29/30 per dollar. The Indian rupee ended off highs on importers'' dollar demand. Banks also bought dollars as local shares ended down. Meanwhile, weak dollar overseas kept sentiment firm for rupee.

On BSE, total number of shares traded were 48.44 crore and total turnover stood at Rs. 5,351.43 crore. On NSE, total number of shares traded were 83.72 crore and total turnover was Rs. 17,217.55 crore.

Top traded volumes on NSE Nifty – Unitech with total volume traded 41590860 shares, followed by Suzlon Energy with 16035525, SAIL with 13970184, Hindalco with 13940974 and DLF with 13136196 shares.

On NSE Future and Options, total number of contracts traded in index futures was 628722 with a total turnover of Rs. 15,651.67 crore. Along with this total number of contracts traded in stock futures were 523214 with a total turnover of Rs. 21,866.20 crore. Total numbers of contracts for index options were 1336336 with a total turnover of Rs. 34,317.58 crore and total numbers of contracts for stock options were 66397 and notional turnover was Rs. 2,299.48 crore.

Today, Nifty would have a support at 5,134 and resistance at 5,192 and BSE Sensex has support at 17,125 and resistance at 17,278.