Pre Session Market Analysis for Apr 05, 2011

Pre Session Analysis
The key equity averages are likely to open negative as Asian stocks are trading lower after a lackluster finish at the Wall Street. Also there were reports of Tokyo Electric Power Co. dumping radioactive water from its crippled nuclear plant.

The MSCI Asia Pacific Index declined 0.8% to 134.99 with three stocks falling for each that gained. Further, Japan"s Nikkei 225 Stock Average is trading lower by 1.15% to 9,606.72 as fishing companies stocks were pressurized after Tokyo Electric Power Co. initiated dumping radioactive water from Fukushima Dai-Ichi nuclear station into the sea.

Separately, Straits Times and Jakarta Composite are trading up by 0.29% and 0.29% respectively. In the domestic arena, the markets are likely to follow the rout of global counter part and trade range-bound with upside movement. CG, IT and TECk will be under focus today.

During the morning trade, the Asian bourses traded higher as South Korea"s won and crude oil touched 30-month highs on anticipation that the global economic recovery is strengthening stimulated by takeover activity. Further, the Japanese stocks rallied after the U.S. jobs report showed better than expected figures and a weakening yen boosted optimism in an economic recovery.

Soon after opening in the positive terrain, the benchmark -- Sensex & Nifty -- indices started trading range-bound on the higher side. However, post mid-session a sudden surge was witnessed among the domestic bourses amidst strong buying across sectors, especially in the Capital Goods and IT space. The strong rally followed after the foreign institutional investors (FIIs) purchased significantly during the session.

The benchmark Nifty was seen closing above the 5,900 mark for the first time since January 7, 2011. The positive opening for the European bourses had further boosted the sentiment in the domestic front. 

The BSE Sensex closed at 19,701.73 up by 281.34 points or by 1.45% and NSE Nifty closed at 5908.45, higher by 82.40 points or by 1.41%. The BSE Midcap was at 7,099.69 higher by 116.75 points or by 1.67% and the BSE SmallCap closed at 8,594.69, up by 236.50 points or by 2.83%. The BSE Sensex touched intraday high of 19,729.60 and intraday low of 19,449.36.

On Monday, the U.S. markets closed flat after hovering around the baseline for most of the session. Stocks closed the previous session with considerable gains as participants responded positively to gains abroad and a better-than-expected jobs report. But, on Monday there was neither strong buying abroad nor any key factor that would have fuelled buying on the domestic front.

This made most of the investors to stay away thus leaving stocks to spend the session stuck in a sideways slog along the flat line. On the sectoral front, materials stocks managed to attract some buying interest, but the sector's leadership was limited by its lack of market weight. However, the materials sector closed with a gain of 0.7%. Further, Tech stocks traded with relative weakness throughout finished with a 0.5% gain as several large-cap tech plays encountered selling pressure.

Semiconductors were among the sector's which were pressurized the most, but after the close it was announced that Texas Instruments (TXN 34.11, -0.12) has offered to acquire National Semiconductor (NSM 14.07, -0.16) for $6.5 billion. Additionally, Pfizer (PFE 20.54, +0.16) sold its Capsugel business to investment firm KKR (KKR 17.14, +0.23), prompting the pharmaceutical giant to pare its forecast. Crude oil contracts for May closed up by 0.6% at $108.47 per barrel, while May natural gas prices closed lower by 1.6% at $4.29 per MMBtu.

In the major indices, the Dow Jones Industrial Average (DJIA) closed with a gain of 23.31 points or 0.19% at 12,400.03, while NASDAQ index finished lower.

Read more about: bse, nse, sensex, nifty, stock market
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