Pre Session Commentary - Oct 23 2009

Today domestic markets are likely to open positive amid bounce back in Asian Market, solid start in SGX Nifty and higher US Market overnight. The trade would be volatile with positive bias. One could expect outperformance from Realty, Banking and Metals sphere as theses sectors were hammered in previous sessions. Today domestic market is likely to trade range bound with positive bias.

On Thursday, Indian market plunged for the third straight session on sluggish global trend and rise in inflation over one per cent. The opening was subdued followed by range bound volatility with negative bias. Fragile trade in European market drifted the bourses downward in late afternoon trade. Latter, Indices continued to trade choppy, as the investors were hesitant to take any fresh long positions and were looking to exit stocks at current high levels. Inflation rose to 1.21% for the week ended Oct 10 from 0.92% the week before. Realty (4.59%), capital goods (2.69%), consumer durable (2.65%) and banking (2.05%) stocks suffered the most while selective FMCG (0.95%) and IT (0.79%) counters attracted good buying support. The Market breadth, indicating the overall strength of the market, was weak.

The BSE Sensex closed lower by 219.43 points or 1.29% at 16,789.74 and NSE Nifty ended down by 75 points or 1.48% at 4,988.60. BSE Mid Caps and BSE Small Caps closed with losses of 139.73 points and 152.62 points at 6,444.27 and 7,647.77 respectively. The BSE Sensex touched intraday high of 17,031.54 and intraday low of 16,721.26.

On Thursday, the US stock market closed positive on strength in blue chip companies and bounce back in financial stocks. Participants welcomed fresh set of better-than-expected earnings reports mainly from Travelers and 3M that surprises the market. Fellow companies AT&T, McDonald''s and Merck also reported better-than-expected earnings for the current quarter. Their cumulative strength supported the Dow outperform the other Indices throughout the session. On the other hand, Financials bounced back with strength to provide the bourses with leadership amid by pleasing quarterly reports from PNC, SunTrust and Fifth Third. Materials stocks too traded strong on a pullback by the U.S. dollar. In economic news, the weekly jobless claims mounted at 531,000, over 515,000 that had been widely expected. Continuing jobless claims fell to 5.92 million, off 98,000. This is the lowest level since the week ended March 28. Leading indicators for September grew 1.0%, as against 0.8% that was widely expected. Home prices for August slide 0.3% month-over-month, which missed the 0.3% gain that was widely forecast. US light crude oil futures for November delivery closed down 0.4% at $81.05 per barrel, on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) ended with gain of 131.95 points at 10,081.31. NASDAQ index surged 14.56 points to 2,165.29 and the S&P 500 (SPX) closed higher by 11.51 points at 1,092.91.

Indian ADRs ended mixed on Thursday. In the banking space, HDFC Bank was up 1.76% and ICICI Bank was up 0.64%. In the IT space, Infosys was up 0.75%, Patni Computers was up 1.91% while Wipro was down 1.26% and Satyam Computers was down 8.24%. In the telecom space, Tata Communication was down 0.45% and MTNL was down 0.87%. In other sectors, Dr Reddy''s Labs was up 1.03%, Sterlite Industries was up 0.34% while Tata Motors ended down 2.66%.

The FIIs on Thursday stood as net seller in equity whereas net buyer in debt. Gross equity purchased stood at Rs. 2,758.30 crore and gross debt purchased stood at Rs. 892.00 crore, while the gross equity sold stood at Rs. 3,149.90 crore and gross debt sold stood at Rs. 425.30 crore. Therefore, the net investment of equity and debt reported were Rs. (391.70) crore and Rs. 467.40 crore respectively.

On Thursday, the partially convertible rupee ended at 46.73/74 per dollar, 0.54% weaker than previous closing at 46.48/49 per dollar on decline in global equities. The sliding share prices raised concerns whether robust inflows seen recently in 2009 could be sustained ahead, while the dollar''s rise overseas also hampered sentiment.

On BSE, total number of shares traded were 42.02 crore and total turnover stood at Rs. 5,806.58 crore. On NSE, total number of shares traded were 77.08 crore and total turnover was Rs. 17,267.19 crore.

Top traded volumes on NSE Nifty – Unitech with total volume traded 46145149 shares, followed by Jaiprakash Associates with 28824091, Suzlon Energy with 15003600, Bharti Airtel with 11729200 and DLF with 11640523 shares.

On NSE Future and Options, total number of contracts traded in index futures was 740133 with a total turnover of Rs. 18,099.14 crore. Along with this total number of contracts traded in stock futures were 713598 with a total turnover of Rs. 24,553.90 crore. Total numbers of contracts for index options were 1623997 with a total turnover of Rs. 41,119.97 crore and total numbers of contracts for stock options were 76245 and notional turnover was Rs. 2,610.21 crore.

Today, Nifty would have a support at 4,982 and resistance at 5,042 and BSE Sensex has support at 16,717 and resistance at 16,989