Pre Session Commentary - Nov 6 2009

Today domestic markets are likely to open positive as all Asian markets have also opened with phenomenal gains on the back of overnight surge in US markets. US markets closed higher due to better results from Cisco and also enthusiastic economic reports. Further, Australia’s central bank has said that the country’s economy will expand at more than three times the pace forecast in August. The strong rally across the Asian markets paves way from northward trend in the domestic markets as well and therefore one could witness frontline as well as small and mid cap stocks surge to significant highs during the day’s session. Domestic markets are likely to trade firmly positive during the day.

On Thursday, domestic stock markets made a sharp turnaround to recover from the day’s low to close with decent gains on heavy buying across the sectoral indices in the final hours. Though the cues from the Asian markets and European markets are not supportive, the market staged smart recovery due to some favoring cues from the domestic arena. The government said that the income tax receipts during April-October 2009 surged 2.9% to Rs. 63,195 crore while the corporate tax receipts during the period grew by 4.6% to Rs. 1,10,000 crore and the direct tax receipts shot up by 3.9% to Rs. 1,73,000 crore. Besides this, the Union Cabinet gave the approval of listing the state run firms on the stock exchanges, which have a track record of profits in the past three years. The planning commission said in a report that the economy is expected to expand by 6.3% in the year to March 2010.

The BSE Sensex closed higher by 151.77 points or (0.95%) at 16,063.90 and NSE Nifty closed up by 54.75 points or (1.16%) at 4,765.55. The BSE Mid Caps closed higher by 121.04 points at 6,115.44 and the BSE Small Caps closed up by 125.32 points at 7,013.85. The BSE Sensex touched intraday high of 16,092.38 and intraday low of 15,564.89.

On Thursday, the US stock market closed higher on the back of strong quarterly report from Cisco and also better than expected jobless claims data. Cisco reported better than expected top and bottom line results. The maker of networking equipment has reported 19 per cent fall in its net income to $1.79 billion or 30 cents per share during the first quarter ended Oct 24 ’09. Besides, the latest initial jobless claims recorded at 512,000, down 20,000 from the previous week and better than the expected 522,000. Continuing claims came in at 5.75 million, which was inline with the expectations and down from 5.82 million in the previous week. The Dow Jones rose the most since July to mark phenomenal gains and crossed 10k mark after a long time. The another important news that traders would closely watch is the government''s official nonfarm jobs report, which will be released before the opening bell Friday morning. The consensus forecast is that the October unemployment will hit 9.9 per cent, which would be the highest level since 1982. US light crude oil futures for December delivery closed with a loss of 0.9 per cent at $79.66 per barrel, on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) ended with gain of 203.82 points at 10,005.96. NASDAQ index surged 49.80 points to 2,105.32 and the S&P 500 (SPX) closed higher by 20.13 points at 1,066.63.

Indian ADRs ended in green on Thursday. In the telecom space, MTNL was up 6.33% and Tata Communication was up 3.39%. In the banking space, HDFC Bank was up 2.04% and ICICI Bank was up 1.66%. In the IT space, Infosys was up 1.05%, Wipro was up 1.36%, Satyam Computers was up 1.34% and Patni Computers was up 7.29%. In other sectors, Sterlite Industries was up 2.35%, Tata Motors was up 1.24% and Dr Reddy''s Labs was up 1.01%.

The FIIs on Thursday stood as net buyers in equity and net sellers in debt. Gross equity purchased stood at Rs 3,395.20 Crore and gross debt purchased stood at Rs 865.70 Crore, while the gross equity sold stood at Rs 3,381.40 Crore and gross debt sold stood at Rs 1,260.40 Crore. Therefore, the net investment of equity and debt reported were Rs 13.70 Crore and Rs (394.70) Crore respectively.

On Thursday, the partially convertible rupee ended at 47.01/02 per dollar, marginally stronger than previous closing at 47.05/06 per dollar. The local currency gained strength on the back of incredible rebound in local stock markets.

On BSE, total number of shares traded were 40 Crore and total turnover stood at Rs 5,972.13 Crore. On NSE, total number of shares traded were 88.31 Crore and total turnover was Rs 16,766.91 Crore.

Top traded volumes on NSE Nifty – Suzlon Energy with total volume traded 91644928 shares, followed by Unitech with 68581365, DLF with 16102671, Jaiprakash Associate with 15604183 and Reliance Comm with 13301781 shares.

On NSE Future and Options, total number of contracts traded in index futures was 1074123 with a total turnover of Rs 24,103.98 Crore. Along with this total number of contracts traded in stock futures were 702816 with a total turnover of Rs 21,408.33 crore. Total numbers of contracts for index options were 2043631 with a total turnover of Rs 48,720.91 Crore and total numbers of contracts for stock options were 73780 and notional turnover was Rs 2,265.29 Crore.

Today, Nifty would have a support at 4,799 and resistance at 4,854 and BSE Sensex has support at 16,178 and resistance at 16,412.