Pre Session-Markets may open lower on weak Asian cues Analysis for May 14, 2012

The key domestic benchmarks are likely to witness a gap down opening today tracking weak cues from their Asian peers. Most Asian markets were trading lower on Monday amid speculation that Greece is set to the exit the single currency as the debt saddled economy struggles to form a government. Renewed worries over the European debt turmoil overshadowed China's move to cut the reserve requirements for the nation's banks by 50 basis points to boost economic growth in Asia's largest economy. The MSCI Asia Pacific Index slid 0.3 percent to 118.28 as of 10:55 a.m. in Tokyo, after rising as much as 0.2 percent. Shanghai Composite was down 0.10 per cent, Hang Seng was down 0.26 per cent and Nikkei 225 was trading lower by 0.06 per cent. The key domestic benchmarks are likely to open lower amid weak Asian cues. The Healthcare and Power stocks will be in focus during today's trade.

An unexpected decline in domestic industrial production led to heavy selling on domestic bourses on Friday as investors pondered over the fate of the Indian economy. The Sensex extended its losing streak to a fourth straight session as poor IIP numbers, coupled with weak global cues played spoilsport.
A shocking decline in the IIP signaled waning domestic and overseas demand and clouded the outlook for Asia's third largest economy. India's industrial output contracted 3.5 per cent, year in year in March 2012, compared to the annual 4.1 per cent rise in February 2012. After witnessing a gap down opening amid weak Asian cues, the benchmarks extended losses as the weak IIP data escalated selling pressure. The benchmarks continued to languish in the negative terrain in afternoon trade but buying in auto and banking stocks led recovery efforts as the Sensex erased gains and touched the baseline. However, the recovery was short-lived as weak European cues amid the Greek political impasse saw the benchmarks close lower for yet another day. On the Sectoral front, Health care and Power fell 1.97 per cent and 1.40 per cent, respectively.

BSE SENSEX closed at 16,292.98, down by 127.07 points or by 0.77 per cent and the NSE Nifty ended at 4,928.9, down by 36.8 points or by 0.74 per cent. The BSE Sensex touched intraday high of 16,447.24 and intraday low of 16,233.76 The NSE Nifty touched intraday high of 4,976.25 and intraday low of 4,906.15. Meanwhile, the BSE MIDCAP closed at 5,948.71, down by 49.61 points or by 0.83 per cent, while the BSE SMLCAP ended at 6,395.38, down by 58.82 points or by 0.91 per cent.

On Friday, most US stock markets ended lower as worries about the health and the transparency of operations at large US banks and financial services institutions overshadowed the improvement in US consumer sentiment this month. The USD 2 billion trading loss announced by financial services giant JP Morgan Chase weighed heavily on market sentiment and hit financial stocks. Weak Chinese industrial output and retail sales data also added to the negative sentiment. However, the losses in stocks were curbed after a report showed that consumer sentiment in the US rose to a four-year high at 77.8 in May 2012 from 76.4 in the previous month, raising optimism over a pickup in consumer spending, the backbone of the world's largest economy.

The Dow Jones Industrial Average closed down 0.27 per cent or 34.44 points at 12,820.60, Nasdaq closed up 0.01 per cent or 0.18 points at 2,933.82 and S&P 500 ended down 0.34 per cent or 4.60 points at 1,353.39.

On Friday, the FII's stood as net buyers in equity but net sellers in debt. Gross equity purchased was Rs 1,933 crore and gross debt purchased stood at Rs 498.90 crore. Gross equity sold was Rs 1,590.70 crore and gross debt sold stood at Rs 718.30 crore. Net investment in equity and debt was Rs 342.30 crore and Rs (219.40) crore respectively.

Top traded volumes on the NSE Nifty were Jaiprakash Associates Ltd. 233,35,249, Hindalco Industries Ltd. 96,08,925, Bharat Heavy Electricals Ltd. 94,90,759, Infrastructure Development Finance Company Ltd. 79,71,068 and Tata Motors Ltd. 79,47,629.

On NSE, total number of shares traded was 62.51 crore with a total turnover of Rs 9,264.29 crore.

In the NSE F&O segment, total number of contracts traded in index futures was 550,359 with a total turnover of Rs 12,658.55 crore and total number of contracts traded in stock futures stood at 490,196 with a total turnover of Rs 11,595.24 crore. Total number of contracts traded in index options was 37,78,388 with a total turnover of Rs 94,859.30 crore and total number of contracts traded in stock options was 181,283 with a total turnover of Rs 4,515.47 crore.