Pre Session Commentary - Oct 29 2009

Today domestic markets are likely to open negative amid feeble ongoing trade in Asian Market, fragile start in SGX Nifty as well and contraction in US Market overnight. The trade would be highly volatile with negative bias. One could expect huge sell off in Banking and Metal stocks specifically and sector specific movement along the curve. Today domestic market is likely to trade range bound with negative bias.

On Wednesday, Indian market closed in the negative terrain after a volatile session. The concerns about the sooner than expected rise in the interest rates after RBI raised its inflation forecast, indicated participants to trade cautiously before turning more bullish on equities. Moreover, the cues from the global market aren’t in favor as the US consumer confidence data that fell to 47.7% from a revised 53.4% in September that led the investors to be calculative. From the sectoral front, the banking stock faced the pressure as RBI did not announce any hike in the ceiling on the portion of government securities, which the banks can park in held to maturity segment. Apart from this, the consumer durables and PSU stocks also remained in the sellers’ radar. While on the other hand, the Realty stocks made a smart come back from the intraday low to close with decent gains. The Market breadth, indicating the overall strength of the market, was weak.

The BSE Sensex closed lower by 69.91 points or 0.43% at 16,283.49 and NSE Nifty closed down by 20.55 points or 0.42% at 4,826.15. The BSE Mid Caps closed up by 9.41 points at 6,166.89 while the BSE Small Caps closed with losses of 31.69 points at 7,206.53. The BSE Sensex touched intraday high of 16,411.14 and intraday low of 16,144.17.

The US markets closed negative on Wednesday ahead of advance third quarter GDP reading and weak home sales data. Stocks gulfed in weakness for entire session as sellers stepped in despite better-than-expected earnings. Stiff sell off across the globe certainly didn''t left any room for bulls, not did disappointing home sales data, which for September fell 3.6% month-over-month to an annualized rate of 402,000 units, over 440,000 units that was widely expected. This caused havoc in stocks and overlooked premarket durable goods orders report that were up 1.0% in September, in-line with expectations. Declines were steep and across the broad as 9 of the 10 major sectors posted losses. In debt market, another round of Treasury auctions was met with strong turnout. 5-year Notes produced an above-mean bid-to-cover ratio 2.6. The yield on the benchmark 10-year Note has slipped to roughly 3.4% from 3.5% in just two days. Majority of the sectors finished the session down mainly from Financials (3.2%), Materials (3.2%), Energy (2.9%) and Consumer Discretionary (2.8%). US light crude oil futures for December delivery closed down by 2.8% at $77.44 per barrel, on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) ended with loss of 119.48 points at 9,762.69. NASDAQ index slipped 56.48 points to 2,059.61 and the S&P 500 (SPX) closed lower by 20.78 points at 1,042.63.

Indian ADRs ended low on Wednesday. In the IT space, Satyam Computers was down 9.98%, Infosys was down 1.7%, Wipro was down 3.04% and Patni Computers was down 0.62%. In the banking space, ICICI Bank was down 3.9% and HDFC Bank was down 1.37%. In the telecom space, Tata Communication was down 5.19% and MTNL was down 2.51%.

The FIIs on Wednesday stood as net buyers in equity whereas net sellers in debt. Gross equity purchased stood at Rs. 4,989.80 crore and gross debt purchased stood at Rs. 498.40 crore, while the gross equity sold stood at Rs. 3,648.80 crore and gross debt sold stood at Rs. 867.80 crore. Therefore, the net investment of equity and debt reported were Rs. 1,341.00 crore and (Rs. 369.40) crore respectively.

On Wednesday, the partially convertible rupee ended at 47.34/35 per dollar, 1.0% weaker than previous closing at 46.88/89 per dollar on pressure by shares sliding for the third straight session and customary month-end dollar demand from refiners.

On BSE, total number of shares traded were 39.56 crore and total turnover stood at Rs. 5,431.94 crore. On NSE, total number of shares traded were 85.89 crore and total turnover was Rs. 18,389.72 crore.

Top traded volumes on NSE Nifty – Unitech with total volume traded 86161189 shares, followed by Suzlon Energy with 23447554, DLF with 13951202, Hindalco with 13591156 and Bharti Airtel with 13101587 shares.

On NSE Future and Options, total number of contracts traded in index futures was 970230 with a total turnover of Rs. 23,212.59 crore. Along with this total number of contracts traded in stock futures were 1099802 with a total turnover of Rs. 34,592.27 crore. Total numbers of contracts for index options were 1881343 with a total turnover of Rs. 46,117.06 crore and total numbers of contracts for stock options were 78083 and notional turnover was Rs. 2,509.09 crore.

Today, Nifty would have a support at 4,763 and resistance at 4,835 and BSE Sensex has support at 16,059 and resistance at 16,339.