Pre Session Market Analysis for May 24, 2011

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Pre Session Market Analysis for May 24, 2011
The key equity averages are likely to open negative as most of the Asian stocks are trading lower as the Wall Street closed with significant losses as participants sentiment was dampened amid renewed concern about global economic growth, the fiscal condition of countries in the eurozone and a stronger dollar.

Further, Japan"s Nikkei 225 is trading lower by 0.09% at 9,452.53 as exporters dropped after reports indicated that economic growth is slowing in the U.S. and Europe. Shanghai Composite is down by 0.68% to 2,755.82 and Hang Seng Index dropped 0.1% to 22,688.21. Separately, Seoul Composite and Jakarta Composite are trading lower by 0.12% and 0.03%, respectively.

In the domestic arena, the markets are likely to follow the rout of global counterpart and trade range-bound with downside movement. CG, Power and Oil&Gas pivotals will be in focus today.

Today, Nifty would have a support at 5,348 and resistance at 5,412 and BSE Sensex has support at 17,867 and resistance at 18,082.

Previous Session

On Monday, The domestic bourses ended the first trading session of the week on a bearish note as ruthless selling across sectors made the benchmark Nifty to close below the psychological support level of 5,400. During the morning trade, the Asian stocks traded 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.

Further, the Japanese market plunged, as manufacturers of construction equipment fell after Nomura Holdings Inc. stated that demand in China will drop. After witnessing a gap down opening, the benchmark indices continued to drag further and made fresh intraday lows. The Capital Goods, Power, Banking, Realty and Metal sectors faced hefty sell-offs as each of dragged by more than 2.50%.

The sentiment got dampened during the morning trade when the concerns over the Eurozone debt crisis rose after Greece and Italy"s credit rating were downgraded. The benchmark Nifty was seen breaching the support level of 5,400 and was dragged near the 5,370 mark. However, during the final couple of hours, the market movement remained quiet as the benchmarks entered a narrow range and traded there for the rest of the session. The negative opening for the European markets had limited impact on the domestic stocks.

The BSE Sensex closed at 17,993.33 down by 332.76 points or by 1.82% an NSE Nifty closed at 5,386.55, lower by 99.80 points or by 1.82%. The BSE Midcap was at 6,661.47, lower by 94.94 points or by 1.41% and the BSE SmallCap closed at 8,057.02, decreasing by 128.16 points or by 1.57%. The BSE Sensex touched intraday high of 18,269.06 and intraday low of 17,971.02.

On Monday, the U.S. markets closed lower as concerted selling dragged the stocks down sharply to their lowest level in a month. The participants" sentiment was dampened amid renewed concern about global economic growth, the fiscal condition of countries in the eurozone and a stronger dollar.

Stocks slipped down initially and never made an attempt to recover. Weakness was largely fuelled by the negative reaction to news that eurozone linchpins Greece and France witness a fall in their latest PMI Manufacturing readings to 58.2 and 55.0, respectively, from the prior month. The overall eurozone PMI Manufacturing reading also pulled back; it came in at 54.8. Further, a downwardly revised forecast for Italy's debt and a cut to Greece's rating during the weekend further stimulated the negative sentiments among the participants.

The euro retreated due to these news thus boosting the buying in the greenback, which climbed to a near two-month high before easing off of that mark into the afternoon and close 0.6% higher against a basket of competing currencies. Further, no sector managed to garner gains, but defensive-oriented issues like consumer staples stocks (-0.7%) and telecom (-0.7%) managed to limit their collective losses to less than 1%.

In the major indices, the Dow Jones Industrial Average (DJIA) closed with a loss of 130.78 or 1.05% at 12,381.26 while NASDAQ index finished down by 44.42 points or 1.58% to 2,758.9. The S&P 500 (SPX) closed lower by 15.9 points or 1.19% to 1,317.37.

The FIIs on Monday stood as net seller in equity and net buyer in debt. Gross equity purchased stood at Rs. 2,239.60 Crore and gross debt purchased stood at Rs. 1,278.90 Crore, while the gross equity sold stood at Rs. 2,314.70 Crore and gross debt sold stood at Rs. 578.20 Crore. Therefore, the net investment of equity and debt reported were Rs. (75.10) Crore and Rs. 700.70 Crore. 

Top traded Volumes on NSE Nifty - ITC Ltd. 9,143,101, Jaiprakash Associates Ltd. 7,205,028, Oil & Natural Gas Corporation Ltd. 5,637,081, Infrastructure Development Finance Company Ltd. 4,310,525, Reliance Communications Ltd. 4,058,406.

On BSE, total number of shares traded was 22.57 Crore and total turnover stood at Rs. 2,352.61 Crore. On NSE, total number of shares traded was 46.79 Crore and total turnover stood at Rs. 9,248.55 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 3,975,301 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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