Pre Session Commentary - Oct 9 2009

Today domestic markets are likely to open positive as majority of Asian markets have also opened in green. US markets closed higher due to better corporate announcements and better than feared job less data. The fourths straight positive closing of US markets have brought a lot of cheer in other markets as well. In the domestic arena, Infosys reported a moderate rise in quarterly profit by 7.5% thus paving encouraging corporate result expectations. Domestic markets are likely to trade positive during the day.

On Thursday, domestic market closed flat after a jittery trade. The opening was on a subdued not despite RIL coming up with a news of giving bonus shares in the ratio of 1:1. There was little charm during the day and traders were cautious ahead of the forthcoming second quarter results. Asian and European markets traded with remarkable gains exuding signs of buying sentiments and firmness at broader level. Trading was in a narrow range, and market participants left no stone unturned to book profits at day’s high that finally resulted in a flat note ending. Realty, FMCG and Auto were the leaders with gains of 2.09%, 2.01% and 1.66% respectively. On the other hand, laggards included Teck, IT and CG as they slumped by 2.80%, 1.86% and 0.01% respectively.

The BSE Sensex closed higher by 36.88 points or (0.22%) at 16,843.54 and NSE Nifty ended flat at 4,988.35. BSE Mid Caps and Small Caps closed with gains 49.85 points and 16.27 points at 6,344.91 and 7,422.72 respectively. The BSE Sensex touched intraday high of 16,998.52 and intraday low of 16,775.36.

On Thursday, the US stock market closed higher as markets recorded its fourth straight gain on the back of encouraging corporate announcements. Dow component Alcoa (AA 14.35, +0.15) reported an adjusted $0.04 per share, which was considerably better than the loss of $0.09 per share that had been widely expected. Alcoa''s report encouraged traders to propel the materials sector to record a remarkable 2.0% gain. On the macro economic perspective the broader market was supported by news that initial claims for the week ending October 3 fell 33,000 to 521,000, which is below the expected 540,000. Meanwhile, continuing claims fell 72,000 to 6.04 million, much below the consensus call of 6.11 million. Energy, Materials and Consumer Discretionary were the leaders of the day with respective gains of 2.3%, 2.0% and 1.5%. However, the Telecom and Health Care were the laggards of the day with losses of 0.8% and 0.1% respectively. US light crude oil futures for November delivery closed with a gain of 3.0% at $71.68 per barrel, on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) ended with gain of 61.29 points at 9,786.87. NASDAQ index surged 13.60 points to 2,123.93 and the S&P 500 (SPX) closed higher by 7.90 points at 1,065.48.

Indian ADRs ended in green on Thursday. In the telecom space, Tata Communication was up 2.07% and MTNL was up 0.57%. In the banking space, HDFC Bank was up 1.46% and ICICI Bank was up 0.64%. In the IT space, Infosys was up 1.92%, Satyam Computers was up 0.16%, Wipro was up 0.49% while Patni Computers was down 1.12%. In other sectors, Dr Reddy''s Labs was up 5.04%, Sterlite Industries was up 2.88% and Tata Motors was up 0.62%.

The FIIs on Thursday stood as net buyers in equity and debt. Gross equity purchased stood at Rs 4,071.70 Crore and gross debt purchased stood at Rs 2,564.70 Crore, while the gross equity sold stood at Rs 3,298.50 Crore and gross debt sold stood at Rs 45.10 Crore. Therefore, the net investment of equity and debt reported were Rs 773.10 Crore and Rs 2,519.60 Crore respectively.

On Thursday, the partially convertible rupee ended at 46.34/35 per dollar, 0.70% stronger than previous closing at 46.66/67 per dollar. The expectations of further capital inflow helped the local currency record its highest gain in a year. The weakening dollar as against other major currencies has also helped the local currency grow stronger every day.

On BSE, total number of shares traded were 53.58 Crore and total turnover stood at Rs 6,474.18 Crore. On NSE, total number of shares traded were 87.22 Crore and total turnover was Rs 20,841.57 Crore.

Top traded volumes on NSE Nifty – Unitech with total volume traded 58979178 shares, followed by Bharti Airtel with 41637786, Suzlon Energy with 23935413, Idea Cellular with 17856625 and Reliance Comm with 17731381 shares.

On NSE Future and Options, total number of contracts traded in index futures was 665970 with a total turnover of Rs 15,969.80 Crore. Along with this total number of contracts traded in stock futures were 685024 with a total turnover of Rs 22,662.83 crore. Total numbers of contracts for index options were 1131203 with a total turnover of Rs 28,624.24 Crore and total numbers of contracts for stock options were 77846 and notional turnover was Rs 2,475.29 Crore.

Today, Nifty would have a support at 4,998 and resistance at 5,078 and BSE Sensex has support at 16,880 and resistance at 16,996.