Pre Session Market Analysis for May 23, 2011

The key equity averages are likely to open negative as most of the Asian stocks are trading lower as Fitch Ratings slashed Greece"s credit rating and Standard & Poor"s declared that Italy"s rating was at risk, deepening concern over Europe"s sovereign debt crisis.

The MSCI Asia Pacific Index dropped 1.6% at 132.53 with about five stocks falling for four that advanced. Further, Japan"s Nikkei 225 is trading lower by 1.38% at 9,474.83 as manufacturers of construction equipment fell after Nomura Holdings Inc. said that demand in China will drop.

Shanghai Composite is down by 1.28% to 2,821.81 and Hang Seng Index dropped 1.57% to 22,835.53. Separately, Seoul Composite and Jakarta Composite are trading lower by 1.94% and 1.28%, respectively. In the domestic arena, the markets are likely to follow the rout of global counterpart and trade range-bound with downside movement. Realty, Oil&Gas and Metal pivotals will be in focus today. 

Today, Nifty would have a support at 5,403 and resistance at 5,513 and BSE Sensex has support at 18,051 and resistance at 18,417.

Previous Session

On Friday, The domestic bourses ended the last trading session of the week on a robust note as buying across sectors paved the way for the second straight session of gains. During the morning trade, most of the Asian stocks traded higher following a positive finish in the Wall Street that stimulated positive sentiment in the participants.

A volatile movement was seen in Asia as the export oriented companies surged on reports showing a decline in the U.S. jobless claims. On the other hand, the Hong Kong developers fell on concern the government will take more steps to curb property prices. After opening in the positive terrain, the benchmark indices gained further momentum and journeyed northwards. A rangebound movement was seen thereon, till the mid-session, post which a smart rally was witnessed.

The benchmark Nifty surged above the 5,500 level as the Construction major, L&T gained for the third straight session. The Sensex heavyweight Reliance Industries gained smartly, contributing to the market rally. Reports stating that Rs 450 crore has been recovered from tax evaders by revenue intelligence arm of finance ministry, has further boosted investors" sentiment. Despite of a mild profit booking towards the end, the benchmarks were seen finishing the session with decent gains. The positive opening for the European markets has further uplifted the sentiment among the domestic stocks. 

The BSE Sensex closed at 18,326.09 up by 184.69 points or by 1.02% an NSE Nifty closed at 5,486.35, higher by 58.25 points or by 1.07%. The BSE Midcap was at 6,756.41, higher by 41.18 points or by 0.61% and the BSE SmallCap closed at 8,185.18, increasing by 39.61 points or by 0.49%. The BSE Sensex touched intraday high of 18,429.47 and intraday low of 18,161.38.

On Friday, the U.S. markets closed lower as the stocks took direction from the dollar that rebounded thus resulting losses for the major equity averages. The stocks dropped more than 1% initially as selling pressure was stoked by a sudden rally by the dollar, which climbed as much as 0.9%.

The greenback"s rally came against the euro, which was pressurised amid rekindled concerns about fiscal conditions in both Greece and Spain, as well as worries about the European Central Bank's debt burden. Weakness was relatively widespread, however defensive-oriented plays like utilities stocks (unch.) and telecom (-0.1%) were able to pare losses. Financials suffered the worst losses as its closed lower by1.5% loss.

Further, retailers were also pressurised as downside guidance by apparel and accessories retailers Gap (GPS 19.22, -4.07) and Aeropsotale (ARO 18.30, -3.04) prompted a precipitous drop in their shares. On the other hand, Ann Taylor (ANN 29.09, -1.11) shares were also imbued by weakness despite reporting an upside earnings surprise and increasing its sales forecast above what Wall Street expectation.

In the major indices, the Dow Jones Industrial Average (DJIA) closed with a loss of 93.28 or 0.74% at 12,512.04 while NASDAQ index finished down by 19.99 points or 0.71% to 2,803.32. The S&P 500 (SPX) closed lower by 10.33 points or 0.77% to 1,333.27.

The FIIs on Friday stood as net seller in equity and debt. Gross equity purchased stood at Rs. 2,112.10 Crore and gross debt purchased stood at Rs. 1,223.40 Crore, while the gross equity sold stood at Rs. 2,119.20 Crore and gross debt sold stood at Rs. 1,306.60 Crore. Therefore, the net investment of equity and debt reported were Rs. (7.10) Crore and Rs. (83.20) Crore.

Top traded Volumes on NSE Nifty - ITC Ltd. 26,209,592, Infrastructure Development Finance Company Ltd. 12,509,683, Oil & Natural Gas Corporation Ltd. 10,306,305, Jaiprakash Associates Ltd. 8,240,099, Reliance Communications Ltd. 7,001,723.

On BSE, total number of shares traded was 24.10 Crore and total turnover stood at Rs. 2,720.12 Crore. On NSE, total number of shares traded was 50.95 Crore and total turnover stood at Rs. 10,184.84 Crore.

On NSE Future and Options, total number of contracts traded in index futures was 581,152 with a total turnover of Rs. 14,880.69 Crore. Along with this total number of contracts traded in stock futures were 659,868 with a total turnover of Rs. 16,586.80 Crore. Total numbers of contracts for index options were 3975301 with a total turnover of Rs. 109,717.51 Crore. and total numbers of contracts for stock options were 152,760 with a total turnover of Rs. 4,024.32 Crore.

Read more about: nse, bse, sensex, nifty
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