Pre Session-Sensex likely to open lower amid bearish Asian cues Analysis for May 15, 2012

The key domestic benchmarks are likely to witness a gap down opening today tracking weak cues from their Asian peers. Asian markets fell on Tuesday as rating agency Moody's downgraded 26 Italian banks including UniCredit SpA and Sanpaolo SpA amid weakened earnings outlook and the nation's deteriorating economic outlook. Meanwhile, Greece continues to be without a government for a second week. Investors are also eyeing the Q1 European GDP report, which is expected to show that Europe's economy shrank for the first time since 2009. The MSCI Asia Pacific Index slid 0.8 percent at 9:35 a.m. in Tokyo. Shanghai Composite was down 0.49 per cent, Hang Seng was down 0.35 per cent, and Nikkei 225 was trading lower by 1.26 per cent. The key domestic benchmarks are likely to track weak cues from Asian markets and open lower.

On Monday, the Sensex extended its four-day losing streak and ended lower as disappointing inflation data dimmed the scope of another rate cut to boost growth. India's annual inflation stood at 7.23 per cent in April 2012, compared to 6.89 per cent in March 2012. Weak global cues also added to the negative sentiment as Asian and European stock markets fell on concerns that Greece may be squeezed out of the Euro as the nation struggles to form a government. After witnessing a gap up opening, led by buying in metal, banking and auto stocks, the Sensex reversed direction and slipped into the negative terrain as disappointing inflation data dimmed the chances of another interest rate cut. The benchmarks fell deeper into the red as weak global cues escalated selling pressure. However, the benchmarks trimmed losses in late trade led by buying in IT and Healthcare stocks.

BSE SENSEX ended at 16,215.84, down by 77.14 points or by 0.47 per cent and the NSE Nifty closed at 4,907.8, down by 21.1 points or by 0.43 per cent. The BSE Sensex touched intraday high of 16,390.33 and intraday low of 16,124.82 The NSE Nifty touched intraday high of 4,957.2 and intraday low of 4,874.5. Meanwhile, the BSE MIDCAP ended at 5,888.95, down by 59.76 points or by 1 per cent, while the BSE SMLCAP closed at 6,314.57, down by 80.81 points or by 1.26 per cent.

US stock markets ended lower on Monday amid growing concerns that Greece may be forced to exit the euro as the debt saddled economy struggles to form a new government. Greek President Karolos Papoulias warned Greek political parties that banks may face the threat of a collapse if deposits keep on dwindling amid the political instability in the country. The deepening concerns over Greece's political impasse lifted the debt yields of periphery economies while the euro fell to a three-month low against the greenback as investors cut back their exposure to risky assets. Financials and Energy were the major laggards, down 2.1 per cent and 1.6 per cent, respectively.

Dow Jones Industrial Average ended down 0.98 per cent or 125.25 points at 12,695.35, Nasdaq closed down 1.06 per cent or 31.24 points at 2,902.58 and S&P 500 ended lower by 1.11 per cent or 15.04 points at 1,338.35.

The FII's on Monday stood as net buyers in equity but net sellers in debt. Gross equity purchased was Rs 1,526.30 crore and gross debt purchased stood at Rs 576.20 crore. Gross equity sold was Rs 1,350.10 crore and gross debt sold stood at Rs 1,004.40 crore. Net investment in equity and debt was Rs 176.20 crore and Rs (428.20) crore respectively.

Top traded volumes on the NSE Nifty were Jaiprakash Associates Ltd. 160,03,654, Infrastructure Development Finance Company Ltd. 99,83,973, Hindalco Industries Ltd. 77,14,533, Tata Motors Ltd. 70,48,752 and Larsen & Toubro Ltd. 66,36,770.

On NSE, total number of shares traded was 51.73 crore with a total turnover of Rs 8,960.6 crore.

In the NSE F&O segment, total number of contracts traded in index futures was 515,964 with a total turnover of Rs 11,945.65 crore and total number of contracts traded in stock futures stood at 465,755 with a total turnover of Rs 11,052.68 crore. Total number of contracts traded in index options was 32,87,850 with a total turnover of Rs 83,291.66 crore and total number of contracts traded in stock options was 177,028 with a total turnover of Rs 4,432.90 crore.