Pre Session Market Analysis for Apr 06, 2011

Market Analysis for Apr 06, 2011
The key equity averages are likely to open negative as Asian stocks are trading lower amid anticipation and worries that the Federal Reserve will pull out stimulus measures and after China raised interest rates.

The MSCI Asia Pacific Index fell 0.4% to 134.63 with about seven stocks falling for every six that rose. Further, Japan"s Nikkei 225 Stock Average is trading lower by 0.21% to 9,594.99 after opening strong on growing concerns about the outlook of company profits as manufacturing activity in the island nation has been disrupted by the massive earthquake that had struck last month.

Further, Shanghai Composite is up by 0.26% to 2,975.1 and Hang Seng Index inclined by 0.10% to 24,175.53. China has increased interest rates for the fourth time since the end of the global financial crisis to counter inflation Separately, Seoul Composite and Jakarta Composite are trading down by 0.10% and 0.20% respectively.

In the domestic arena, the markets are likely to follow the rout of global counter part and trade range-bound with downside movement. FMCG, Bankex and Oil&Gas pivotals will be in focus today. On Tuesday, the domestic bourses ended on a flat to negative note as the investors decided to book some profit after the previous session"s rally.

During the morning trade, the Asian bourses traded lower after a lackluster finish in the Wall Street and as Tokyo Electric Power Co. starting dumping radioactive water from its crippled nuclear plant. Further, the Japanese stocks traded weak as fishing companies were pressurized after Tokyo Electric Power Co. initiated dumping radioactive water from Fukushima Dai-Ichi nuclear station into the sea.

Soon after opening in the positive terrain, the benchmark indices plunged into the negative terrain. Selling pressure emerged in the market, especially in the Oil&Gas, FMCG and Banking space, as the participants decided to book some profits. However, the benchmark Nifty took support near the 5,850 mark and the losses were gradually pared off. The benchmark Nifty managed to close fractionally in the positive terrain, whereas the Sensex closed with moderate losses. The negative opening for the European bourses had limited impact on the domestic front.

The BSE Sensex closed at 19,686.82, down by 14.91 points or by 0.08% and NSE Nifty closed at 5,910.05, higher by 1.60 points or by 0.03%. The BSE Midcap was at 7,155.54 higher by 55.85 points or by 0.79% and the BSE SmallCap closed at 8,712.92, up by 118.23 points or by 1.38%. The BSE Sensex touched intraday high of 19,770.21 and intraday low of 19,523.54.

On Tuesday, the U.S. markets closed flat as stocks managed to counter choppy trade initially to register a strong advance, but failed to keep up the momentum. Stocks opened flat owed to lackluster action in the previous session, besides global counterparts failed to provide support as most of the equity averages moved lower following China's 25-basis point rate increase and the latest round of ISM Services readings from Europe.

Read more about: bse, nse, sensex, nifty
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