Pre Session Commentary - Oct 30 2009

Today domestic markets are likely to open positive amid strong early trade in Asian Market, robust start in SGX Nifty as well and US Market rallying overnight. The trade would be gusted towards northward. One could expect buyers stepping in for Banking and Metal stocks along the curve. Lower than expected earning result from Reliance Industries could snatch some gains. Today domestic market is likely to trade range bound with positive bias.

On Thursday, Indian market closed in the negative territory tracking the weakness in the global markets and a rise in the inflation figure that weighed on the investors’ sentiments. The expiry of the October derivatives contract scheduled today also led the investors to be calculative to book their positions. The concerns about the sooner than expected rise in the interest rates after RBI raised its inflation forecast, prompt the investors to be bit cautious to book further positions. The Asian stocks slipped for a third straight day tracking the weak cues from the US markets where the weakness in US housing market triggered the fears about the health of the global recovery. Moreover, the volatility of the rupee against the dollar in the past few days has fueled the concerns that there may be more losses for the corporate sector on hedging. Declines were steep and across the broad as 11of the 13 major sectors posted losses. The Market breadth, indicating the overall strength of the market, was weak.

The BSE Sensex closed lower by 230.77 points or 1.42% at 16,052.72 and NSE Nifty closed down by 75.60 points or 1.57% at 4,750.55. The BSE Mid Caps closed lower by 120.10 points at 6,046.79 and the BSE Small Caps closed with losses of 92.69 points at 7,113.84. The BSE Sensex touched intraday high of 16,264.09 and intraday low of 15,993.83.

The US markets closed strong on Thursday amid better than expected third quarter GDP data, that snap the consecutive losses in the week but couldn’t resist from heading into Friday with a week-to-date loss more than 1%. Despite some resilience in early trade, stocks ascent and took all 10 major sectors higher. The real momentum for the market came from GDP number that surged to an annualized growth rate of 3.5% over 3.2% that was largely expected from contracting 0.7% in the second quarter. This overlooked the initial jobless claims for the week ended Oct 24 totaled 530,000 against 525,000 that were widely expected. Financial sector was in limelight with best single-session percentage gain in the three months. Followed by Material stocks as broader market support along with commodities and basic materials prices were propped up by a sliding US dollar. With participants gusting towards riskier holdings, Treasuries came under pressure and benchmark 10-year Note down around 20 ticks, which lifted its yield back to 3.5%. All major sectors finished the session with strong gains mainly from Financials (4.3%), Materials (3.2%), Consumer Discretionary (2.7%) and Energy (2.4%). US light crude oil futures for December delivery closed up by 3.1% at $79.89 per barrel, on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) ended with gain of 199.89 points at 9,962.58. NASDAQ index spurted 37.94 points to 2,097.55 and the S&P 500 (SPX) closed higher by 23.48 points at 1,066.11.

Indian ADRs ended mostly in green barring a couple of stocks which ended down. In the IT space, Satyam Computers was up 13.97%, Infosys was up 1.88%, Wipro was up 2.64% and Patni Computers was up 1.56%. In the banking space, HDFC Bank was up 4.05% and ICICI Bank was up 2.09%. In the telecom space, MTNL was down 0.64% and Tata Communication was down 4.7%.

The FIIs on Thursday stood as net buyers in equity and debt as well. Gross equity purchased stood at Rs. 3,035.90 crore and gross debt purchased stood at Rs. 418.20 crore, while the gross equity sold stood at Rs. 3,008.10 crore and gross debt sold stood at Rs. 315.50 crore. Therefore, the net investment of equity and debt reported were Rs. 27.70 crore and Rs. 102.60 crore respectively.

On Thursday, the partially convertible rupee ended at 47.21/22 per dollar, 0.3% stronger than previous closing at 47.34/35 per dollar helped by dollar sales by exporters taking profits.

On BSE, total number of shares traded were 38.31 crore and total turnover stood at Rs. 5,000.49 crore. On NSE, total number of shares traded were 95.51 crore and total turnover was Rs. 20,641.51 crore.

Top traded volumes on NSE Nifty – Unitech with total volume traded 73627168 shares, followed by Suzlon Energy with 56524581, Jaiprakash Associates with 16470310, DLF with 14372415 and Bharti Airtel with 14319514 shares.

On NSE Future and Options, total number of contracts traded in index futures was 1078513 with a total turnover of Rs. 25,333.18 crore. Along with this total number of contracts traded in stock futures were 1243466 with a total turnover of Rs. 37,752.75 crore. Total numbers of contracts for index options were 2169308 with a total turnover of Rs. 52,645.71 crore and total numbers of contracts for stock options were 71914 and notional turnover was Rs. 2,281.10 crore.

Today, Nifty would have a support at 4,736 and resistance at 4,835 and BSE Sensex has support at 16,059 and resistance at 16,372.