Pre Session Market Analysis for May 03, 2011

Pre Session Market Analysis for May 03, 2011
The key equity averages are likely to open negative as most of the Asian stocks fell as oil and copper futures dropped and Australia & New Zealand Banking Group reported earnings that was below the analysts" estimates.

The MSCI Asia Pacific Excluding Japan Index fell 0.7% to 505.09 with about two stocks dropping for each that advanced. Further, Japan"s Nikkei 225 will remain closed today. The Shanghai Composite is down by 0.42% to 2,899.25 and Hang Seng Index gained 0.2% to 23,767.14. Besides, a Chinese manufacturing index dropped in April as compared to the previous month signifying that growth may slow down after the nation increased interest rates and allowed faster yuan gains.

Separately, Taiwan Weighted and Seoul Composite are trading lower by 1.21% and 1.18%, respectively. In the domestic arena, the markets are likely to follow the rout of global counterpart and trade range-bound with downside movement. Bankex, Oil&Gas and FMCG pivotals will be in focus today.

Previous Session

On Monday, the domestic bourses ended the first trading session of the week on a bearish note as the benchmark indices marked its sixth straight session of losing streak on the back of rising concerns of RBI"s policy meet tomorrow.

During the morning trade, 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, cooling concern of slowdown in global economic growth.

The Japanese market traded higher as robust U.S. earnings and higher commodity prices relieved concern over global economic growth.

Soon after opening in the positive, the benchmark indices plunged into the negative terrain as the banking stocks took the major hit ahead of the RBI"s policy meet tomorrow. As the day progressed, the situation worsened and the benchmark Nifty was seen dragging near the important support level of 5,690.

The Banking heavyweights including SBI, ICICI Bank, Axis Bank and PNB faced hefty sell-offs and declined by 4.06%, 1.44%, 0.79% and 2.94%, respectively. No signs of recovery were seen during the session as investors remained cautious regarding the RBI meet and finally the benchmarks closed near their respective intra-day lows. The positive opening for the European markets had failed to make any impact in the domestic sentiment.

The BSE Sensex closed at 18,998.02 down by 137.94 points or by 0.72% and NSE Nifty closed at 5,701.30, lower by 48.20 points or by 0.84%. The BSE Midcap was at 7,027.83 down by 66.43 points or by 0.94% and the BSE SmallCap closed at 8,615.19, lower by 100.12 points or by 1.15%. The BSE Sensex touched intraday high of 19,253.87 and intraday low of 18,954.76.

On Monday, the U.S. markets closed lower due to directionless trading in afternoon action thus leading to the broad market's first loss in five sessions. Further, news that the U.S. forces have killed terrorist leader Osama bin Laden dominated headlines all day, but the stock market lacked apparent reaction to the story.

And as some of the global markets were closed on observance of holiday, there were few cues to follow. Initial market attracted modest buying pushing up both the S&P 500 and the Dow closer to fresh three-year highs, but the Nasdaq actually hit its highest level in a decade.

However, lack of leadership and a 1.3% drop among energy stocks eventually dragged the market lower. Energy sector faced some selling pressure due to fall in oil prices.

Health care stocks were the only one to sustain strong gain closed higher by 1.0% amid support from biotech plays, which were propped up by news that Cephalon (CEPH 80.11, +3.09) will be acquired by Teva Pharmaceuticals (TEVA 47.27, +1.54) for $81.50 per share, which is a premium of almost 6% over its closing price from last week.

Data had little impact on trade that included April ISM Manufacturing Index, which came in at 60.4, above the expected 59.7.

In the major indices, the Dow Jones Industrial Average (DJIA) closed with a loss of 3.18 points or 0.02% at 12,807.36 while NASDAQ index finished lower by 9.46 points or 0.33% to 2,864.08. The S&P 500 (SPX) closed down by 2.39 points or 0.18% to 1,361.22.

The FIIs on Monday stood as net seller in equity and in debt. Gross equity purchased stood at Rs. 3239.70 Crore and gross debt purchased stood at Rs. 717.30 Crore, while the gross equity sold stood at Rs. 3434.50 Crore and gross debt sold stood at Rs. 1158.00 Crore. Therefore, the net investment of equity and debt reported were Rs. (194.80) Crore and Rs. (440.70)Crore.

Top traded Volumes on NSE Nifty - Jaiprakash Associates Ltd. 9327142, Infrastructure Development Finance Company Ltd. 7060906, DLF Ltd. 5892442, ITC Ltd. 5177704, Oil & Natural Gas Corporation Ltd. 3604418.

On BSE, total number of shares traded was 22.46 Crore and total turnover stood at Rs. 2350.37 Crore. On NSE, total number of shares traded was 48.80 Crore and total turnover stood at Rs. 9554.78 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. 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 5,672 and resistance at 5,729 and BSE Sensex has support at 18,903 and resistance at 19,092.

Read more about: bse, nse, sensex, nifty
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