Pre Session Market Analysis for Apr 11, 2011

Posted By: Religare
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Pre Session Market Analysis for Apr 11, 2011
The key equity averages are likely to open negative as Asian stocks are trading lower tracking overnight losses in the Wall Street.

The US market registered losses on Friday as investors turned cautious ahead of earnings season. Japan"s Nikkei 225 Stock Average is trading lower by 0.33% to 9,736.07 as carmakers were pressurized after Citigroup downgraded the country"s auto sector. Meanwhile, Shanghai Composite is up by 0.64% to 3,049.52 and Hang Seng Index gained 0.12% to 24,425.76.

Chinese stocks gained as the country registered a faster-than-expected growth in exports and imports last month which may assist the government to strengthen its fight against inflation. Separately, Straits Times and Taiwan Weighted are trading lower by 0.40% and 0.47% respectively.

In the domestic arena, the markets are likely to follow the rout of global counter part and trade range-bound with downside movement. Realty, Bankex and Metal pivotals will be in focus today. 

During the morning trade, the Asian stocks swung between gains and losses. Asian bourses finished off the session on a positive note amidst speculation that damage from yesterday"s 7.1 magnitude earthquake in Japan has limited impact and the engineering companies may benefit from efforts to rebuild the country.

Soon after a positive start, the benchmark indices plunged into the negative terrain. As the day progressed, the market entered into a sideways trend below the baseline. The benchmark Nifty was seen dipping below the 5,850 mark which acted as a solid support during the past three sessions.

The sentiment in the domestic front was negated as the crude oil prices surged after IMF warned that the global economy is on the verge of entering a new era of oil scarcity that could give new highs to the crude prices. Further, the investors remained cautious and booked profit on speculation that the RBI may hike rates again in its monetary policy statement in the month of May. The positive opening for the European bourses had failed to make any impact in the domestic arena.

The BSE Sensex closed at 19,451.45, down by 139.73 points or by 0.71 % and then NSE Nifty was at 5,842 down by 43.7 points or by 0.74 %. The BSE MIDCAP was at 7173.5 down by 90.79 points or by 1.25 %, while the BSE SMLCAP was at 8,772.55 down by 124.64 points or by 1.4 %. The BSE Sensex touched intraday high of 19,697.21 and intraday low of 19,388.42.

On Friday, the U.S. markets closed lower after spending most of the session around the base line. Session witnessed lack of stimulators and participants took their cues from overseas markets that helped the bourses open positive, but failed to keep up the momentum and stocks returned to the flat line to trade listlessly.

The lackluster tone in the trade is driven by a cautious posture ahead of earnings season, which gets its unofficial start on Monday evening, when Dow component Alcoa (AA 17.92, -0.20) reports its latest quarterly results. Further, market's recent struggle to overcome from range bound trade also comes as the S&P 500 faces resistance in the 1340 level.

During the second half of the session selling effort intensified such that it dragged all three of the major equity averages to weekly lows, but in recurring theme buyers stepped back in to provide support that helped stocks trim their losses.

On the other hand, commodities showed strength due to the dollar's ongoing doldrums. It fell to a new 52-week low against the euro, which was quoted with a 1.2% loss at $1.447 at the close of trade. Crude oil contracts for May closed up by 2.3% at $112.8 per barrel, while May natural gas prices closed lower by 0.4% at $4.04 per MMBtu.

Read more about: bse, nse, sensex, nifty
Story first published: Monday, April 11, 2011, 8:32 [IST]
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