Pre Session Market Analysis for May 05, 2011

Pre Session Market Analysis for May 05, 2011
Equity market is likely to open negative as most of Asian stocks declined, pulling regional benchmark index lower for a third day in a row on lower-than-expected growth in the US service industries and employment that sparked concern about the pace of the economic recovery. Further, the MSCI Asia Pacific Excluding Japan Index dropped 0.5% to 493.27 in Hong Kong, with five stocks retreating for every two that jumped.

Shanghai Composite is down by 0.40% to 2,854.58 and Hang Seng Index lower by 0.34% to 80.17 to 23,235.07. As per report, China"s fund manager is edging resource and agriculture stocks to fight against the worst inflation in 3-yrs amid rising commodity prices.

Meanwhile, Hong Kong home sales declined to the lowest volume in excess of 2-yrs in April as officials" curb and rising mortgage rates sapped demand after a price surge since 2009. Separately, Straits Times is flat to positive at 0.01% while Seoul Composite is trading down by 0.91%.

In the domestic arena, the markets are likely to follow the rout of global counter part and trade range-bound with upside movement. Metal, IT and Realty pivotals will be in focus today.

Previous Session

On Wednesday, soon after opening in the negative terrain, the benchmark indices dragged further till the Nifty took support near the 5,500 level. As the day progressed the market was seen trading in a tight range in the negative terrain.

The sentiment remained bearish on concerns of rising interest rates by Reserve Bank of India (RBI), which is likely to affect the growth. Although a smart recovery was witnessed during the final hour of trade and the benchmarks were pulled above the baseline, the rally remained short-lived. Among the rate sensitive sectors, the Auto and Metal space dragged heavily.

Sensex heavyweight Reliance Industries, ONGC, HDFC bank and SBI gave good support to the market and capped the downward rally to a certain extent. Finally, the benchmark Nifty settled with 0.50% losses. The mixed opening for the European markets had limited impact on the domestic bourses.

The BSE Sensex closed at 18,469.36, down by 65.33 points or by 0.35% and NSE Nifty closed at 5,537.15, lower by 28.10 points or by 0.50%. The BSE Midcap was at 6,865.96 down by 31.38 points or by 0.45% and the BSE SmallCap closed at 8,390.30, lower by 45.67 points or by 0.54%. The BSE Sensex touched intraday high of 18,604.36 and intraday low of 18,339.53.

On Wednesday, the US major equity averages began to sell-off after below-than-expected ISM Non-Manufacturing Index numbers for April were released. It fell to 52.8 from 57.3, which was widely expected to hold at 57.4. Meanwhile, not much damage was realized to a disappointing ADP Employment Charge report for April.

The Change report stated that last month's private payrolls rose by 179,000, but lower than the 200,000 private payrolls that was expected, on an average, among economists polled by Besides, some hullabaloo was threatening to impact the trading over the news that Portugal has been offered a bailout worth about €78 billion.

Net-net, the aggressive selling pulled the market lower despite some pressure was eased after midday trade. Energy and material stocks were the hardest hit, almost down by more than 2% in the day trade. Due to strong support and bottom fishing, these pared losses in the afternoon trade to close down by 1.6% and 1.7% respectively. For the second consecutive session, share volume on the NYSE broke 1 billion which hasn't happened in more than a month.

Crude oil futures for June closed lower by 1.6% to $109.24 per barrel while June natural gas ended by 1.9% lower at $4.58 per MMBtu. Further, June futures for Gold dropped by 1.7% to $1,514.80 per ounce and July futures for silver fell 7.4% at $39.45 per ounce at the New York Mercantile Exchange.

In the major indices, the Dow Jones Industrial Average (DJIA) closed with a loss of 83.93 points or 0.66% at 12,723.58, NASDAQ index finished lower by 13.39 points or 0.47% to 2,828.23. The S&P 500 (SPX) closed lower by 9.3 points or 0.69% to 1,347.32.

The FIIs on Wednesday stood as net seller in Equity while net buyer in Debt. Gross equity purchased stood at Rs 2,693.00.Crore and gross debt purchased stood at Rs 1,896.80 Crore, while the gross equity sold stood at Rs 3,944.80 Crore and gross debt sold stood at Rs 733.20 Crore.

Therefore, the net investment of equity and debt reported were Rs (1,251.80) Crore and Rs 1,163.60 Crore respectively.

Top traded volumes on NSE Nifty - Jaiprakash Associates with total traded volume of 20,369,820, followed by IDFC with 8,362,773, ONGC with 6,649,233, ITC with 5,481,309 and DLF with 4,539,043.

On BSE, total number of shares traded was 24.45 Crore and total turnover stood at Rs 2,719.52 Crore. On NSE, total number of shares traded were 57.42 Crore and total turnover was Rs 12,009.53 Crore.

On NSE Future and Options, total number of contracts traded in index futures was 591971 with a total turnover of Rs. 15,353.38 Crore. Along with this total number of contracts traded in stock futures were 516418 with a total turnover of Rs. 13,354.65 Crore.

Total numbers of contracts for index options were 3129883 with a total turnover of Rs. 8,8641.52 Crore and total numbers of contracts for stock options were 99878 with a total turnover of Rs. 2,690.58 Crore.

Today, Nifty would have a support at 5,500 and resistance at 5,550 and BSE Sensex has support at 18,380 and resistance at 18,520.

Read more about: bse, nse, sensex, nifty
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