Pre Session Market Analysis for Apr 28, 2011

Pre Session Market Analysis for Apr 28, 2011
The key equity averages are likely to open positive as most of the Asian stocks are trading higher following a positive close in the Wall Street that came after the Federal Reserve improved its pledge to boost U.S. economic growth with low interest rates.

The MSCI Asia Pacific Index gained 1.4% to 139.74 with about more than two stocks advancing for each that fell. Further, Japan"s Nikkei 225 is trading higher by 1.28% to 9,815.49 as companies including Advantest Corp. registered better-than-expected earnings and positive comments from the U.S. Federal Reserve boosted participants sentiments.

Shanghai Composite is up by 0.91% to 2,951.95 and Hang Seng Index gained 0.76% to 24,074.19. Separately, Straits Times and Seoul Composite are trading up by 0.45% and 0.53% respectively. In the domestic arena, the markets are likely to follow the rout of global counterpart and trade range-bound with upside movement. Realty, CG and Bankex pivotals will be in focus today.

Previous session

On Wednesday, the domestic bourses ended on a disappointing note as the participants remained cautious ahead of tomorrow"s FNO expiry. During the morning trade, most of the Asian stocks traded higher amidst signs that the global economy recovery is on track and better-than-expected company earnings.

Further, the Japanese market traded up as U.S. consumer confidence improved and Japan"s government announced that 90% of the country"s earthquake-hit factories will resume production by July. Soon after opening in the positive, the benchmark indices started trading volatile and touched the baseline for quite a few number of times. However, a strong bout of selling came in during the second half of the session and the benchmark Nifty was dragged near the 5,820 mark.

Though the losses were mildly recovered, it was not pared of completely as strong selling across the Realty, Capital Goods, Metal, Power and Banking sectors kept the sentiment down. Sensex heavyweight Reliance Industries Ltd plunged by 1.56% to Rs 985.15 after reports came that the company may face penalty from the government due to falling short of targeted gas production at its D6 block.

The BSE Sensex closed at 19,448.69 down by 96.66 points or by 0.49% and NSE Nifty closed at 5,833.90, lower by 34.50 points or by 0.59%. The BSE Midcap was at 7,238.71 down by 0.57 points or by 0.01% and the BSE SmallCap closed at 8,897.04, higher by 0.18 points. The BSE Sensex touched intraday high of 19,633.63 and intraday low of 19,412.79.

On Wednesday, the U.S. markets closed higher after hovering around the flat line initially as participants waited for commentary from the Fed and its Chairman, Ben Bernanke. However, stocks eventually broke free from their narrow range to extend their recent highs. Despite the upward trend of market in recent sessions, traders were hesitant to provide support.

The latest FOMC policy statement indicated that the Fed expects to keep the Fed Funds Rate still at 0.00% to 0.25% at exceptionally low rate levels for an extended period. Besides, it also noted that the economic recovery is proceeding at a moderate pace, rather than at a firmer pace that it had noted in its previous statement.

Fed Chairman Bernanke in a press conference said that the Fed has lowered its GDP forecast for 2011 to the range 3.1% to 3.3%, from 3.4% to 3.9% and also lowered the top end of GDP estimates for 2012 and 2013. The revision to economic growth and unemployment has come before report on first quarter GDP that would be released on Thursday, which is widely expected to show growth of 1.7%.

Earnings reports were not given much importance during the session, but there were some dramatic swings at the individual level. (AMZN 196.63, +14.33) gained as much as 8% to a record high following its latest quarterly report.

Boeing (BA 76.12, +0.57) and WellPoint (WLP 75.54, +2.57) also benefited from a positive response to their quarterly reports, thus setting fresh 52-week highs. The energy sector managed to erase a loss of more than 1% as Hess (HES 82.74, +2.07) and Baker Hughes (BHI 77.28, +3.22) led the rally, due to stronger-than-expected earnings.

In the major indices, the Dow Jones Industrial Average (DJIA) closed with a gain of 95.59 points or 0.76% at 12,690.96 while NASDAQ index finished higher by 22.34 points or 0.78% to 2,869.88. The S&P 500 (SPX) closed up by 8.42 points or 0.62% to 1,355.66.

The FIIs on Wednesday stood as net seller in equity and net buyer in debt. Gross equity purchased stood at Rs. 2369.30 Crore and gross debt purchased stood at Rs. 2000.50 Crore, while the gross equity sold stood at Rs. 2518.10 Crore and gross debt sold stood at Rs. 1869.80 Crore. Therefore, the net investment of equity and debt reported were Rs. (148.80) Crore and Rs. 130.70 Crore.

Top traded Volumes on NSE Nifty - Cairn India Ltd. 10623324, Jaiprakash Associates Ltd. 8574960, Sterlite Industries (India) Ltd. 6566209, Infrastructure Development Finance Company Ltd. 6060397 Reliance Industries Ltd. 5648346.

On BSE, total number of shares traded was 28.75 Crore and total turnover stood at Rs. 3189.37 Crore. On NSE, total number of shares traded was 62.15 Crore and total turnover stood at Rs. 11633.06 Crore.

On NSE Future and Options, total number of contracts traded in index futures was 715743 with a total turnover of Rs. 20009.82 Crore. Along with this total number of contracts traded in stock futures were 1092307 with a total turnover of Rs. 29756.31 Crore. Total numbers of contracts for index options were 4434355 with a total turnover of Rs. 130583.07 Crore. and total numbers of contracts for stock options were 118426 with a total turnover of Rs. 3513.86 Crore.

Today, Nifty would have a support at 5,803 and resistance at 5,891 and BSE Sensex has support at 19,350 and resistance at 19,642.

Read more about: bse, nse, sensex, nifty
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