Pre Session Market Analysis for May 18, 2011

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Pre Session Market Analysis for May 18, 2011
The key equity averages are likely to open positive as most of the Asian stocks are trading higher as Tokyo Electric Power Co. proposed a detailed plan for stabilizing a stricken nuclear-power plant, thus stimulating positive sentiment among the participants.

The MSCI Asia Pacific Index gained 0.7% at 134.84 with about three stocks advancing for each that fell. Further, Japan"s Nikkei 225 is trading higher by 0.88% at 9,651.12 as the Yen halted its gains against the dollar thus easing concerns over exporter"s profit. Shanghai Composite is up by 0.38% to 2,863.53 and Hang Seng Index grew 0.55% to 23,026.59.

Seoul Composite and Jakarta Composite are trading lower by 1.15% and 0.22%, respectively. In the domestic arena, the markets are likely to follow the rout of global counterpart and trade range-bound with upside movement. Oil&Gas, Bankex and Metal pivotals will be in focus today.

Today, Nifty would have a support at 5,399 and resistance at 5,492 and BSE Sensex has support at 18,010 and resistance at 18,318.

Previous Session

On Tuesday, The bears took charge of the Dalal Street during today"s trade, as the benchmark indices plunged by more than 1% due to heft sell offs in the Oil&Gas and Banking space. During the morning trade, most of the Asian stocks traded lower as the the won and oil fell following worries over the pace of the global economic recovery.

The sentiment was also dampened as Greece asked for more bailout funds and slower-than-estimated manufacturing growth in the New York region raised concerns about the global economic health. After a flat to negative opening the benchmark indices surged above the baseline. However, the upmove remained short-lived and within an hour of trade the market dipped into the negative terrain.

A rangebound movement was witnessed as the participants were looking forward to the SBI Q4 numbers. The country"s largest bank disappointed the market heavily as it"s net profit plunged by 98.9% to Rs 20.9 crore as compared to RS 1,866.6 crore in the corresponding quarter last year. The stock was ruthlessly sold off and finally closed with 7.8% losses to Rs 2,413.60.

As a result, the benchmark Nifty broke the important support level of 5,470 and was dragged near the 5,420 mark. Although a mild short covering happened towards the end, it was not enough to cover up the hefty losses.

Additionally, comments made by RBI governor Subbarao that country"s growth may be hampered while taming inflation together with plunge in the Sensex heavyweight Reliance Industries has further weighed negatively on the sentiment. The negative opening for the European markets had also dampened the sentiment in the domestic front.

The BSE Sensex closed at 18,137.35 down by 207.68 points or by 1.13% an NSE Nifty closed at 5,438.95, lower by 60.05 points or by 1.09%. The BSE Midcap was at 6,804.16, down by 45.43 points or by 0.66% and the BSE SmallCap closed at 8,255.47, lower by 51.08 points or by 0.61%. The BSE Sensex touched intraday high of 18,435.80 and intraday low of 18,084.67.

On Tuesday, the U.S. markets closed near the baseline as participants pared risk during the first half and a downturn by the dollar and strength among financials gradually boosted the broader market in the latter part of the session.

During the mid-day, intensive selling dragged the stocks down markedly, thus pushing all the three major equity averages at lowest level in almost a month. Tech stocks were pressurized the most and the sector lost more than 1% as shares of Hewlett-Packard (HPQ 36.85, -2.94) dropped drastically to a new 52-week low following a disappointing forecast, which completely overshadowed the company's upside earnings surprise for the latest quarter.

However, the sector managed to trim the losses and close lower by 0.2%. On the other hand data had little impact to stimulate buying. Financials were a source of leadership as it gained 0.7% owed to a rebound by bank stocks, which lifted the KBW Bank Index a 1.5% gain.

In the major indices, the Dow Jones Industrial Average (DJIA) closed with a loss of 68.79 or 0.55% at 12,479.58 while NASDAQ index finished up by 0.9 points or 0.03% to 2,783.21. The S&P 500 (SPX) closed down by 0.49 points or 0.04% to 1,328.98.

The FIIs on Tuesday stood as net seller in equity and debt. Gross equity purchased stood at Rs. 2,300.70 Crore and gross debt purchased stood at Rs. 680.30 Crore, while the gross equity sold stood at Rs. 6,007.10 Crore and gross debt sold stood at Rs. 1,092.10 Crore. Therefore, the net investment of equity and debt reported were Rs. (3,706.40) Crore and Rs. (411.80) Crore.

Top traded Volumes on NSE Nifty - Oil & Natural Gas Corporation Ltd. 15,224,165, Jaiprakash Associates Ltd. 11,678,038, State Bank of India 8,011,380, Infrastructure Development Finance Company Ltd. 6,628,732, ITC Ltd. 5,823,047.

On BSE, total number of shares traded was 21.94 Crore and total turnover stood at Rs. 2,761.50 Crore. On NSE, total number of shares traded was 45.06 Crore and total turnover stood at Rs. 10,680.77 Crore.

On NSE Future and Options, total number of contracts traded in index futures was 420,252 with a total turnover of Rs. 10,751.20 Crore. Along with this total number of contracts traded in stock futures were 435,707 with a total turnover of Rs. 11,180.18 Crore.

Total numbers of contracts for index options were 2,659,968 with a total turnover of Rs. 74,370.16 Crore. and total numbers of contracts for stock options were 108,310 with a total turnover of Rs. 2,970.60 Crore.

Read more about: bse, nse, sensex, nifty
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