Pre Session Commentary - Oct 28 2009

Today domestic markets are likely to open negative amid weak trade in Asian Market, weak start in SGX Nifty as well and mixed performance in US Market overnight. The trade would be highly volatile with negative bias. One could expect stock specific and sector specific movement along the curve on the back of RBI monitory policy. Realty, Banking stocks are to be watched for. Today domestic market is likely to trade range bound with negative bias.
On Tuesday, Indian markets closed on a down beat note on the anticipation of tightening of monetary policy by Reserve bank of India (RBI). The RBI, which injected huge amount of money in the recent past in order to give a boost to the economy, kept its key policy rates unchanged. The RBI kept the repo rate, reverse repo rate and CRR unchanged at 4.75%, 3.25% and 5% respectively. While it increased the SLR to 25% from 24%. Moreover, it hiked the inflation target to 6.5% from 5%. While it kept the FY10 GDP target unchanged at 6% with upward and the HTM bond ratio at 25%. However, it aims to contain inflation 4-4.5%. It also said the aggregate deposits to grow 18%. RBI, ended a special repurchase facility for banks and another for the funding needs of non-bank financial companies, mutual funds and housing finance companies effective immediately. It also ended a forex swap facility for banks as well as cut an export credit refinance facility to a pre-crisis level of 15% from 50% with immediate effect. Realty (6.24%), Metals (5.82%), Banking (3.82%) and Consumer Durables (3.26%) stocks were hammered brutally. The Market breadth, indicating the overall strength of the market, was weak.
The BSE Sensex closed lower by 387.10 points or 2.31% at 16,353.40 and NSE Nifty closed down by 124.20 points or 2.50% at 4,846.70. BSE Mid Caps and BSE Small Caps closed with losses of 236.24 points and 334.80 points at 6,157.48 and 7,238.22 respectively. The BSE Sensex touched intraday high of 16,699.09 and intraday low of 16,311.50.
The US markets closed mixed on Tuesday as Dow was able to net a modest gain while Nasdaq finished in negative territory. The former gained as Exxon Mobil, Chevron, BP Plc and IBM reported better than expected earnings while the latter fell due to collective weakness among large-cap resulted to underperform the other headline Indices. Consumer Discretionary stocks were under pressure as retailers retreated following a disappointing Consumer Confidence Index reading of 47.7 for October. Energy stocks outperformed the broader market due to strong trade in oil stocks and rebound in oil prices. Treasuries spurted amid the mixed action among equity. That was supported by a strong 3.6 bid-to-cover outcome for a $44 billion auction of 2-year Treasuries. This helped the broader 10-year Note rose nearly one full point and gusted its yield back below 3.5%. Majority of the sectors finished the session down mainly from Consumer Discretionary (1.7%), Industrials (1.0%), Tech (0.9%) and Materials (0.9%). US light crude oil futures for December delivery closed up by 1.0% at $79.44 per barrel, on the New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) ended with gain of 14.21 points at 9,882.17. NASDAQ index slipped 25.76 points to 2,116.09 and the S&P 500 (SPX) closed lower by 3.54 points at 1,063.41.
Indian ADRs ended in red on Tuesday. In the banking space, ICICI Bank was down 8.19% and HDFC Bank was down 2.11%. In the telecom space, Tata Communication was down 4.55% and MTNL was down 3.04%. In the IT space, Infosys was down 2.18%, Satyam Computers was down 3.47%, Patni Computers was down 0.97% while Wipro was up 0.37%.
The FIIs on Tuesday stood as net buyers in equity whereas net sellers in debt. Gross equity purchased stood at Rs. 2,147.90 crore and gross debt purchased stood at Rs. 484.30 crore, while the gross equity sold stood at Rs. 1,956.90 crore and gross debt sold stood at Rs. 777.00 crore. Therefore, the net investment of equity and debt reported were R. 191.00 crore and (Rs. 292.70) crore respectively.
On Tuesday, the partially convertible rupee ended at 46.92/93 per dollar, 0.6% stronger than previous closing at 46.64/65 per dollar.
On BSE, total number of shares traded were 42.75 crore and total turnover stood at Rs. 5,932.36 crore. On NSE, total number of shares traded were 91.84 crore and total turnover was Rs. 20,193.69 crore.
Top traded volumes on NSE Nifty – Unitech with total volume traded 102783737 shares, followed by Suzlon Energy with 23590937, DLF with 16277902, Jaiprakash Associates with 15753666 and IDFC with 14537239 shares.
On NSE Future and Options, total number of contracts traded in index futures was 1196264 with a total turnover of Rs. 29,244.90 crore. Along with this total number of contracts traded in stock futures were 1048245 with a total turnover of Rs. 33,641.10 crore. Total numbers of contracts for index options were 2233080 with a total turnover of Rs. 55,538.59 crore and total numbers of contracts for stock options were 96502 and notional turnover was Rs. 3,189.54 crore.
Today, Nifty would have a support at 4,792 and resistance at 4,883 and BSE Sensex has support at 16,239 and resistance at 16,433.