Pre Session Commentary - Oct 7 2009

Today domestic markets are likely to open positive on the back of second day overnight rally in the US markets that has backed the sentiments across Asian markets, which have also opened in green. There could be some broad based buying sentiment that would help majority of sectors trade with firmness. The weakness in Dollar has supported a lot of buying across stocks and commodities in US and the same has proved beneficial for other markets as well. Domestic markets are likely to trade positive today.

On Tuesday, Indian market ended on positive zone after showing high instability during the trading session. Stocks managed to regain strength as sentiments turned upbeat with the positive opening of European markets. Firm trading in US index futures also contributed to the upward journey. However, stocks were in negative terrain during most of the trading backed by heavy selling pressure mainly on telecom stocks on concerns that the lower call charges will reduce earnings. TRAI is contemplating ruling per second billing mandatory, which will impact earnings of companies of the sector. Meanwhile, According to Montek Singh Ahluwalia, deputy chairman of the Planning Commission, it is expected that India''''s economy will grow at 6.3% or more in the year to March 2010. BSE Sensex ended above 16,900 level and NSE Nifty closed above 5,000 level.

The BSE Sensex closed higher by 92.13 points or (0.55%) at 16,958.54 and NSE Nifty ended up 24.20 by points or (0.48%) at 5,027.40. BSE Mid Caps closed with gains of 11.64 points at 6,207.43 and Small Caps closed with losses of 53.51 points at 7,372.49. The BSE Sensex touched intraday high of 16,988.56 and intraday low of 16,622.05.

On Tuesday, the US stock market ended up for a second day as news that Australia has raised lending rates by 25 basis points revitalized hopes for the global recovery. Fall in dollar to its weakest level in almost two weeks against the Euro and against most other major currencies, also added to the sentiments. Besides, dollar decline also bolstered commodity prices. Stocks were able to report rise along with overseas gains, regardless of a downward drift in afternoon action. Materials stocks closed with a gain of 1.9% and financials finished 1.2% higher. All 30 Dow stocks ended higher, led by Alcoa, Intel and JP Morgan. US light crude oil futures for November delivery managed to report modest gains and closed up at $70.88 per barrel, on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) gained by 131.50 points at 9,731.25. NASDAQ index surged 35.42 points to 2,103.57 and the S&P 500 (SPX) closed higher by 14.26 points at 1,054.42.

Indian ADRs ended in green on Tuesday. In the banking space, HDFC Bank was up 4.3% and ICICI Bank was up 1.74%. In the IT space, Infosys was up 0.61%, Wipro was up 0.22%, Patni Computers was up 2.2% while Satyam Computers was flat. In the telecom space, Tata Communication was up 2.76% while MTNL was down 1.96%. In other sectors, Sterlite Industries was up 4.88%, Dr Reddy’s Labs was up 2.73% and Tata Motors was up 1.99%.

The FIIs on Tuesday stood as net sellers in equity and net buyers in debt. Gross equity purchased stood at Rs 3,709.60 Crore and gross debt purchased stood at Rs 371.90 Crore, while the gross equity sold stood at Rs 3,947.10 Crore and gross debt sold stood at Rs 272.90 Crore. Therefore, the net investment of equity and debt reported were Rs (237.50) Crore and Rs 99.10 Crore respectively.

On Tuesday, the partially convertible rupee ended at 46.89/90 per dollar, 1.3% stronger than Monday’s closing at 47.52/53. Reserve Bank of Australian`s (RBA`s) rate rise announcement also supported the rupee as it has raised the hopes that India could follow and pushed the dollar lower.

On BSE, total number of shares traded were 45.33 Crore and total turnover stood at Rs 6,388.20 Crore. On NSE, total number of shares traded were 99.00 Crore and total turnover was Rs 21,128.25 Crore.

Top traded volumes on NSE Nifty – Bharti Airtel with total volume traded 69639854 shares, followed by Unitech with 67363392, Idea Cellular with 36924209, Suzlon Energy with 34127546 and Reliance Comm with 31392514 shares.

On NSE Future and Options, total number of contracts traded in index futures was 928302 with a total turnover of Rs 22,145.79 Crore. Along with this total number of contracts traded in stock futures were 688236 with a total turnover of Rs 21,809.66 crore. Total numbers of contracts for index options were 1679682 with a total turnover of Rs 42,333.21 Crore and total numbers of contracts for stock options were 80680 and notional turnover was Rs 2,443.95 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.