Pre Session Commentary - Nov 4 2009

Today domestic markets are likely to open positive amid bounce back in Asian stocks, strong trade in SGX Nifty and mixed to positive close of US Market overnight. One could expect buyers stepping in for Realty and Metal stocks along the curve. The trade would spike towards northward. Today domestic market is likely to trade range bound with positive bias.

On Tuesday, Indian market extending losses for the six straight trading sessions, the Indian market tumbled in the final hours of the session to close on a negative terrain tracking the weakness across the Asian markets. Also the negative opening of the European markets spoiled the investors’ sentiments. Moreover, the reports that the Comptroller and Auditor General (CAG) has set up a team to examine the expenses incurred by Reliance industries on its D6 natural gas filed in the Krishna Godavari basin, put some pressures. This led to the fears that there may be audit in other major companies led to the major selloff across the sectoral indices. The BSE Sensex closed below the 15,410 mark while Nifty just below 4,570 mark. From the sectoral front, the Realty stocks was the major hit as it was deteriorated by 9.76% followed by Metal and Oil and Gas indices, which closed with loss of 5.95% and 4.10% respectively.

The BSE Sensex closed deep down by 491.34 points or 3.09% at 15,404.94 and NSE Nifty closed down by 147.80 points or 3.14% at 4,563.90. The BSE Mid Caps closed lower by 224.81 points at 5,789.49 and the BSE Small Caps closed with losses of 317.48 points at 6,741.24. The BSE Sensex touched intraday high of 15,957.06 and intraday low of 15,330.56.

The US markets closed mixed on Tuesday despite a strong dollar and some sloppy action but material stocks were able to make strong gains as gold prices spiked higher. Session started in negative terrain as the US dollar gained ground against basket of major currencies. Gold spurted smartly by trading higher for the entire session and closed 2.9% higher at $1,084.90 per ounce, but that was after it hit a new record high of $1,087.30 per ounce. The bounce back in greenback’s also brought some cheer into the broader equity market. Participants bought industrial stocks, which closed 1.4% higher. Financial traded erratically before setting with a 0.4% gain. Factory orders for September were the lone piece of data on the economic calendar. Orders increased stronger-than-expected 0.9%, but that didn''t have much of impact on trade. The upcoming economic data will be focus. The ADP Employment Report for October is due, along with the ISM Services Index for October. The FOMC also issues its latest policy statement. US light crude oil futures for December delivery closed up by 1.9% at $79.63 per barrel, on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) ended with loss of 17.53 points at 9,771.91. NASDAQ index climbed 8.12 points to 2,057.32 and the S&P 500 (SPX) closed higher by 2.53 points at 1,045.41.

Indian ADRs ended mixed on Tuesday. In the IT space, Wipro was down 0.08%, Patni was down 1.19%, Infosys was up 0.67% while Satyam was up 0.39%. In the banking space, HDFC bank was down 0.21% while ICICI bank was up 0.88%. In the telecom space, Tata Comm was down 7.95% and MTNL was up 0.35%. In others, Sterlite was down 2.55%, Dr Reddys was down 1.92% while Tata Motors was up 2.22%.

The FIIs on Tuesday stood as net buyer in equity and debt as well. Gross equity purchased stood at Rs. 4,072.50 crore and gross debt purchased stood at Rs. 945.60 crore, while the gross equity sold stood at Rs. 3,336.80 crore and gross debt sold stood at Rs. 474.70 crore. Therefore, the net investment of equity and debt reported at Rs. 735.70 crore and Rs. 470.90 crore respectively.

On Tuesday, the partially convertible rupee ended at 47.40/41 per dollar, 0.9% weaker than previous closing at 46.96/97 per dollar as foreign banks were buying dollars on behalf of overseas fund. Meanwhile, contraction in exports also added to the bearish sentiment for the rupee.

On BSE, total number of shares traded were 41.57 crore and total turnover stood at Rs. 5,120.83 crore. On NSE, total number of shares traded were 86.28 crore and total turnover was Rs. 17,404.01 crore.

Top traded volumes on NSE Nifty – Suzlon Energy with total volume traded 60251141 shares, followed by Unitech with 52983492, Bharti Airtel with 27471661, Reliance Communication with 19823294 and Jaiprakash Associates with 16223300 shares.

On NSE Future and Options, total number of contracts traded in index futures was 836111 with a total turnover of Rs. 18,772.34 crore. Along with this total number of contracts traded in stock futures were 636486 with a total turnover of Rs. 18,585.17 crore. Total numbers of contracts for index options were 1768737 with a total turnover of Rs. 42,333.53 crore and total numbers of contracts for stock options were 64684 and notional turnover was Rs. 1,883.34 crore.

Today, Nifty would have a support at 4,586 and resistance at 4,628 and BSE Sensex has support at 15,494 and resistance at 15,724.