Pre Session Commentary - Oct 26 2009

Today domestic markets are likely to open flat to positive amid strong trade in Asian Market, strong start in SGX Nifty as well but lower US Market overnight. The trade would be highly volatile with positive bias. One could expect stock specific and sector specific movement along the curve. Defensive sector will be benefited in choppy session.
Today domestic market is likely to trade range bound with positive bias.

On Friday, Indian market closed with marginal gains after a sharp rally at the initial stage on the back of heavy profit booking at the higher level. The volatility was high during the session. Though the mark opened with strong gains and traded firmly for most part of the day but the profit booking at the final hours did the spoil sport. The FMCG stocks remained in the lime light on the back of reports by Assocham that this sector is expected to witness growth of 20% in July-September period this fiscal up from 14% in the previous quarter. FMCG (3.03%), Health Care (2.05%), IT (2.04%) and Bankex (1.31%) stocks rallied while selective sectors as Oil&Gas (2.71%) and Capital Goods (1.44%) were under selling pressure. The Market breadth, indicating the overall strength of the market, was positive.

The BSE Sensex closed higher by 21.07 points or 0.13% at 16,810.81 and NSE Nifty closed up by 8.45 points or 0.17% at 4,997.05. BSE Mid Caps and BSE Small Caps closed with gains of 66.62 points and 25.73 points at 6,510.89 and 7,673.50 respectively. The BSE Sensex touched intraday high of 17,006.77 and intraday low of 16,765.20.

The US markets closed lower on Friday as investors booked some profits leaving the major indices to end the week on a down note and log their first weekly loss since the start of the month. The investors also set aside the large batch of better than expected earnings results and an improved rate of existing home sales. The material sector marked the worst performing sector during the session as it fell by 2.1% due to sharp weakness in the broader market and a stronger dollar made commodities look less attractive. Further the Fed Chairmen Bernanke comments about the financial system did not provide much direction to the markets as he didn''t offer any new insight or make any original statements. The Nasdaq remained in green in the early trade mainly led by a pair of positive earnings from Microsoft and Amazon.com. Shares of Microsoft hit a fresh 15-month high, while shares of Amazon hit new record highs. On the economic front, the existing home sales data for the month of September jumped to an annualized rate of 5.57 million from 5.09 million the month before. The upturn was stronger than had been expected, given that the consensus forecast called for an annualized sales rate of 5.35 million units in September. US light crude oil futures for December delivery closed down by 0.8% at $80.50 per barrel, on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) ended with loss of 109.13 points at 9,972.18. NASDAQ index slipped 10.82 points to 2,154.47 and the S&P 500 (SPX) closed lower by 13.31 points at 1,079.60.

The Indian ADRs ended mixed yesterday. In the IT pack, Infosys was up 0.89%, Satyam was up 0.53%, Wipro was up 0.27%, while Patni was down 1.14%. In the telecom space, Tata Comm was down 0.35% and MTNL was down 3.21%. In the banking space, ICICI Bank was down 1.73% and HDFC Bank was down 1.20%. In the other space, Sterlite was down 1.46%, Tata Motors was down 2.14%, while Dr Reddys was up 3.71%.

The FIIs on Friday stood as net seller in equity whereas net buyer in debt. Gross equity purchased stood at Rs. 2,682.50 crore and gross debt purchased stood at Rs. 914.00 crore, while the gross equity sold stood at Rs. 2,978.30 crore and gross debt sold stood at Rs. 38.20 crore. Therefore, the net investment of equity and debt reported were (Rs. 295.70) crore and Rs. 875.80 crore respectively.

On Friday, the partially convertible rupee ended at 46.50/51 per dollar, 0.5% stronger than previous closing at 46.73/74 per dollar as a rise in domestic share prices raised expectations of more capital inflows.

On BSE, total number of shares traded were 37.10 crore and total turnover stood at Rs. 5,130.45 crore. On NSE, total number of shares traded were 72.88 crore and total turnover was Rs. 16,682.46 crore.

Top traded volumes on NSE Nifty – Unitech with total volume traded 49300727 shares, followed by Jaiprakash Associates with 22600953, IDFC with 13011635, Suzlon Energy with 11866413 and Ambuja Cement with 9824378 shares.

On NSE Future and Options, total number of contracts traded in index futures was 652071 with a total turnover of Rs. 15,951.21 crore. Along with this total number of contracts traded in stock futures were 691595 with a total turnover of Rs. 23,984.98 crore. Total numbers of contracts for index options were 1459765 with a total turnover of Rs. 36,928.57 crore and total numbers of contracts for stock options were 85136 and notional turnover was Rs. 2,854.91 crore.

Today, Nifty would have a support at 4,972 and resistance at 5,032 and BSE Sensex has support at 16,797 and resistance at 16,989.