Pre Session Market Analysis for May 13, 2011

Pre Session Market Analysis for May 13, 2011
The benchmark of the equity averages are likely to open negative as most of the Asian stocks are trading lower despite a positive finish in the Wall Street as investors sentiment was dampened by the poor company results from Japan that were impacted by nation"s worst earthquake.

The MSCI Asia Pacific Index fell 0.3% at 136.01 with about four stocks losing for the three that gained. Further, Japan"s Nikkei 225 is trading lower by 0.24% at 9,693.26 on concerns that China"s decision to increase reserve ratios for its largest lenders may slow global economic growth.

Shanghai Composite is marginally up by 0.09% to 2,846.66 and Hang Seng Index fell 0.41% to 22,979.9. In the domestic arena, the markets are likely to follow the rout of global counterpart and trade range-bound with downside movement. CG, Bankex and Metal pivotals will be in focus today.

Previous Session

On Thursday, the domestic bourses ended on a disappointing note as the benchmark indices slide significantly amidst hefty sell off in the Metal, Capital Goods and Banking space. During the morning trade, most of the Asian stocks traded lower tracking the overnight plunge in the Wall Street and a fall in commodity prices amidst concern that China will further tighten monetary policy, dampening the investors" sentiment.

Further, the Japanese market declined on worries that growing global inflation will curb economic growth. Soon after opening in the negative terrain, the benchmark indices started trading range bound in the negative terrain.

The outstanding IIP data which exceeded estimates, came in just before the mid-session, boosting the sentiment. The benchmarks were seen surging above the baseline. However, the rally didn"t last long and the market was seen plunging into negative soon. The better than expected IIP data raised concerns over further interest rate hikes by the RBI in order to tackle inflation.

The rate sensitive sectors including Metal, Bank and Auto faced significant sell offs. Further, the Capital Goods, Power and IT sectors also faced substantial selling pressure. The benchmark Nifty broke the important support level of 5,520 during the session and came near the 5,475 level. The negative opening for the European markets had further dampened the sentiment in the domestic front. 

The BSE Sensex closed at 18,335.79 down by 249.17 points or by 1.34% and NSE Nifty closed at 5,486.15, lower by 78.90 points or by 1.42%. The BSE Midcap was at 6,844.16, down by 62.93 points or by 0.91% and the BSE SmallCap closed at 8,335.43, lower by 89.48 points or by 1.06%. The BSE Sensex touched intraday high of 18,610.02 and intraday low of 18,314.34. 

On Thursday, the U.S. markets closed higher despite sharp losses by global counterpart and an intense selling pressure faced by commodities following an announcement by the China's central bank to increase the country's reserve requirement ratio.

Further, a jump by the dollar above its 50-day moving average for the first time in months also pressurized initial trade. However, the dollar failed to sustain its momentum and fell to a fractional loss against competing currencies. This led to rebound by the market supported by defensive-oriented stocks such as consumer staples (+1.3%), health care (+0.9%), and utilities (+0.9%).

On the other hand, energy stocks witnessed selling pressure, but the broader market's bounce and an upturn in commodities prices pulled the sector from a loss of more than 1% to finish flat. On the corporate front, Dow component Cisco (CSCO 16.93, -0.85) came into focus for its latest quarterly announcement which showed an upside earnings surprise, that was overshadowed by disappointing forecast.

On the economic front, the Producer Price Index (PPI) for April grew by 0.8%, which is above the expected 0.5% increase. Additionally, initial weekly jobless claims came at 434,000, above the expected 423,000.

In the major indices, the Dow Jones Industrial Average (DJIA) closed with a gain of 65.89 points or 0.52% at 12,695.92, while NASDAQ index finished higher by 17.98 points or 0.63% to 2,863.04. The S&P 500 (SPX) closed up by 6.57 points or 0.49% to 1,348.65.

The FIIs on Thursday stood as net buyer in equity and net seller in debt. Gross equity purchased stood at Rs. 2,374.10 Crore and gross debt purchased stood at Rs. 238.60 Crore, while the gross equity sold stood at Rs. 2,129.90 Crore and gross debt sold stood at Rs. 799.70 Crore. Therefore, the net investment of equity and debt reported were Rs. 244.20 Crore and Rs. (561.10) Crore.

Top traded Volumes on NSE Nifty - Hindalco Industries Ltd. 8,501,421, Infrastructure Development Finance Company Ltd. 7,663,554, Jaiprakash Associates Ltd. 6,146,900, DLF Ltd. 5,620,830, Reliance Communications Ltd. 4,827,127.

On BSE, total number of shares traded was 33.19 Crore and total turnover stood at Rs. 2,584.05 Crore. On NSE, total number of shares traded was 60.53 Crore and total turnover stood at Rs. 9,298.33 Crore.

On NSE Future and Options, total number of contracts traded in index futures was 341,016 with a total turnover of Rs. 8,834.22 Crore. Along with this total number of contracts traded in stock futures were 408,202 with a total turnover of Rs. 10,711.37 Crore. Total numbers of contracts for index options were 1,931,368 with a total turnover of Rs. 54,299.68 Crore, and total numbers of contracts for stock options were 92,790 with a total turnover of Rs. 2,514.83 Crore.

Today, Nifty would have a support at 5,442 and resistance at 5,513 and BSE Sensex has support at 18,188 and resistance at 18,426.

Read more about: bse, nse, nifty, sensex
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