Pre Session Market Analysis for May 02, 2011

Pre Session Market Analysis for May 02, 2011
Equity markets are likely to open positive as most of the Asian stocks rose, pushing the regional benchmark index to the peak level in almost four months as the earnings reports from the U.S. companies came at better than analyst expectation, thus cooling concern of slowdown in global economic growth.

The MSCI Asia Pacific Index gained 0.4% to 140.08 with about three stocks gaining for each that dropped. Further, Japan"s Nikkei 225 gained 0.97% to 9,945.24 as robust U.S. earnings and higher commodity prices relieved concern over global economic growth.

The Shanghai Composite is up by 0.85% to 2,911.51 and Hang Seng Index gained 0.36% to 23,720.81. Separately, Seoul Composite and Jakarta Composite are trading up by 1.27% and 0.48%, respectively. In the domestic arena, the markets are likely to follow the rout of global counterpart and trade range-bound with upside movement. Metal, Oil&Gas and IT pivotals will be in focus today.

Previous Session

On Friday, The domestic bourses ended the last trading session of the week on a disappointing note as the benchmark indices continued its fifth straight session of losing streak on the back of hefty sell-offs across sectors. During the morning trade, most of the Asian stocks traded lower as U.S. economic growth and South Korean industrial production slowed, fuelling concerns regarding earnings improvement.

The Chinese stocks pared some of its initial gains as tighter bank lending combined with a stronger yuan against the dollar dampened the outlook of the economy. Soon after opening in the positive, the benchmark indices were dragged into the negative terrain and started trading volatile across the baseline.

However, post mid-session the selling pressure intensified and the benchmark Nifty was dragged near the important support level of 5,690-5,700 levels. The investors remained cautious ahead of the RBI"s policy announcement next week and the rate sensitive sectors like the Realty, Banking and Metal space faced the maximum hammering during the session.

During the final thirty minutes, the benchmarks took a U-turn and most of the losses were pared off. The negative opening for the European markets had further dampened the sentiment in the domestic front.

The BSE Sensex closed at 19,135.96 down by 156.06 points or by 0.81% and NSE Nifty closed at 5749.50, lower by 35.95 points or by 0.62%. The BSE Midcap was at 7,094.26 down by 74.19 points or by 1.03% and the BSE SmallCap closed at 8,715.31, lower by 138.77 points or by 1.57%. The BSE Sensex touched intraday high of 19,356.50 and intraday low of 19,015.05.

On Friday, the U.S. markets closed higher such that all the three major equity averages closed the week with gains more than 2%. The northward movement was part of a longer climb that witnessed the Dow and S&P 500 gain in seven of the past eight sessions and the Nasdaq despite gaining only a single point today, it marked gains in eighth straight session.

Even amid a bunch of earnings reports investors have stayed on the sidelines. During the past three weeks, around 300 companies of the S&P 500 reported earnings and above 80% of them have managed to either reach or exceed the Wall Street expectation. The latest round of results included a stronger-than-expected report from Dow component Caterpillar (CAT 115.41, +2.77), which reached to a record high.

Further, Merck (MRK 35.95, +0.18) also garnered some gains on its own upside earnings surprise. Fellow blue chip Microsoft (MSFT 25.92, -0.79) pared some of their strength even though company's bottom line was better than expected, but narrower margins and reduced target prices among analysts fuelled some concern.

The broad market's gains were modest, but energy registered an impressive performance and gained around 1.5% amid broad strength, which left only a few sector members behind. Occidental Petroleum (OXY 114.29, +9.16) was a top performer as climbed nearly 9% to an all-time high.

In the major indices, the Dow Jones Industrial Average (DJIA) closed with a gain of 47.23 points or 0.37% at 12,810.54 while NASDAQ index finished higher by 1.01 points or 0.04% to 2,873.54. The S&P 500 (SPX) closed up by 3.13 points or 0.23% to 1,363.61.

The FIIs on Friday stood as net seller in equity and in debt. Gross equity purchased stood at Rs. 4267.60 Crore and gross debt purchased stood at Rs. 735.40 Crore, while the gross equity sold stood at Rs. 4537.60 Crore and gross debt sold stood at Rs. 2166.40 Crore. Therefore, the net investment of equity and debt reported were Rs. (270.00) Crore and Rs. (1431.00) Crore.

Top traded Volumes on NSE Nifty - Ambuja Cements Ltd. 63715525, Infrastructure Development Finance Company Ltd. 9106758, ICICI Bank Ltd. 4824384, Steel Authority of India (SAIL) Ltd. 4761398, Sesa Goa Ltd. 1287584.

On BSE, total number of shares traded was 28.65 Crore and total turnover stood at Rs. 2923.93 Crore. On NSE, total number of shares traded was 71.54 Crore and total turnover stood at Rs. 13441.52 Crore.

On NSE Future and Options, total number of contracts traded in index futures was 492122 with a total turnover of Rs. 13211.83 Crore. Along with this total number of contracts traded in stock futures were 516369 with a total turnover of Rs. 13710.60 Crore.

Total numbers of contracts for index options were 2450216 with a total turnover of Rs. 71458.44 Crore. and total numbers of contracts for stock options were 96319 with a total turnover of Rs. 2654.03 Crore.

Today, Nifty would have a support at 5,720 and resistance at 5,806 and BSE Sensex has support at 19,039 and resistance at 19,326.

Read more about: bse, nse, sensex, nifty
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