Pre Session Commentary - Oct 6 2009

Today domestic markets are likely to open positive on the back of phenomenal rebound in the US markets during overnight trading and also the Asian markets have opened in green. The positive remarks and increased rating from Goldman Sachs for the US large cap banks have raised hopes of many investors across the globe. On the other hand the weakening dollar could further weigh on the concerns of growth of global economy. Domestic markets are likely to trade positive today.

On Monday, Indian market dived into red to close with huge losses along with other Asian counterparts. Profit booking together with weaker-than-expected US jobs report weighed on sentiments. The firm trading in US index futures along with positive European markets were unable to bring any respite. Moreover, investors priced in the weakness in global markets on Friday, 2nd October 2009, when the Indian market was closed for a public holiday. BSE Sensex ended above 16,900 level and NSE Nifty closed around 5,000 level.

The BSE Sensex closed lower by 268.14 points or (1.56%) at 16,866.41 and NSE Nifty ended down 80.20 by points or (1.58%) at 5,003.20. BSE Mid Caps and Small Caps closed with losses of 106.22 and 161.18 points at 6,195.79 and 7,426 respectively. The BSE Sensex touched intraday high of 17,062.01 and intraday low of 16,835.80.

On Monday, the US stock market closed higher breaking the four consecutive loosing streaks. The weakening dollar gave a lot of support to the stocks at broader level. Specifically financial stocks were in limelight after Goldman Sachs raised their rating on the US large cap banks. Diversified banks finished the session 5.6% higher, simultaneously lifting the broader financial sector to a 3.3% gain and helped it outperform every other major sector. The weak dollar helped the stocks as well as the CRB Commodity Index that gained by 1.3%. The US dollar fell by a drastic 0.5% as against other basket of currencies. In the macro economic scenario, ISM Services Index reported a better-than-expected reading of 50.9. The broad based buying helped the entire 10 major sectors surge higher. Financial, Energy, Materials and Industrials were the leaders of the day with respective gains of 3.3%, 2.2%, 2% and 1.9% respectively. The US light crude oil futures for November delivery closed up by 0.7% at $70.41 per barrel, on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) gained by 112.08 points at 9,599.75. NASDAQ index surged 20.04 points to 2,068.15 and the S&P 500 (SPX) closed higher by 15.25 points at 1,040.46.

Indian ADRs ended higher on Wall Street on Monday. In the IT space, Wipro was up 4.21%, Satyam Computers was up 3.54%, Infosys was up 3.01% and Patni Computers was up 2.02%. In the banking space, ICICI Bank was up 4.86% and HDFC Bank was up 1.41%. In the telecom space, Tata Communication was up 0.96% while MTNL was down 2.19%. In other sectors, Tata Motors was up 3.04%, Dr Reddy''s Labs was up 2.75% and Sterlite Industries was up 1.01%.

The FIIs on Monday stood as net buyers in equity and debt. Gross equity purchased stood at Rs 4,632.50 Crore and gross debt purchased stood at Rs 467 Crore, while the gross equity sold stood at Rs 3,260.40 Crore and gross debt sold stood at Rs 59.10 Crore. Therefore, the net investment of equity and debt reported were Rs 1,372.10 Crore and Rs 407.90 Crore respectively.

On BSE, total number of shares traded were 43.27 Crore and total turnover stood at Rs 5,369.40 Crore. On NSE, total number of shares traded were 81.80 Crore and total turnover was Rs 18,347.14 Crore.

Top traded volumes on NSE Nifty – Unitech with total volume traded 52268900 shares, followed by Bharti Airtel with 39670710, Suzlon Energy with 24659833, Idea Cellular with 10373274 and Hindalco with 8573519 shares.

On NSE Future and Options, total number of contracts traded in index futures was 518425 with a total turnover of Rs 12,497.85 Crore. Along with this total number of contracts traded in stock futures were 530297 with a total turnover of Rs 17,679.03 crore. Total numbers of contracts for index options were 949133 with a total turnover of Rs 24,021.73 Crore and total numbers of contracts for stock options were 59561 and notional turnover was Rs 1,892.16 Crore.

Today, Nifty would have a support at 5,039 and resistance at 5,088 and BSE Sensex has support at 16,941 and resistance at 17,069.