Pre Session Market Analysis for May 09, 2011

Posted By: Religare
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Pre Session Market Analysis for May 09, 2011
The key equity averages are likely to open positive as most of the Asian stocks are trading positive on favourable payrolls report boosted confidence in the world"s largest economy.

The MSCI Asia Pacific Index remained little changed at 137.6 with about the same number of stocks falling as advanced. On the other hand, Japan"s Nikkei 225 is trading lower by 0.21% at 9,838.24 as participants sentiment were dampened as the government requested to close a nuclear reactor located close to an earthquake fault-line fuelling concern of the economic growth.

However, the Shanghai Composite is up by 0.59% to 2,880.92 and Hang Seng Index advanced 0.95% to 23,378.01. Separately, Straits Times and Taiwan Weighted are trading higher by 1.28% and 0.93%, respectively. In the domestic arena, the markets are likely to follow the rout of global counterpart and trade range-bound with upside movement. Bankex, Oil&Gas and Auto pivotals will be in focus today.

Previous Session 

On Friday, The domestic bourses ended the last trading session of the week on a robust note as the benchmark indices marked an end to the nine straight sessions of losing streak backed by strong buying in the Banking and Auto sectors. During the morning trade, Asian stocks traded weak tracking the overnight fall in the US market.

Further, the sentiment was dampened in Asia after the inflationary concerns spread in Philippines and Malaysia which joined the party in raising interest rates to tackle similar conditions. Meanwhile, the Japanese market fell on slower than expected growth in the US service industry and rising jobless claims that fueled concern about pace of growth in the economy. Soon after opening in the positive terrain, the benchmark indices started trading range bound on the higher side.

The sentiment was boosted after the inflationary concerns eased on the back of sharp decline in the crude oil prices. The rate sensitive sectors like Banking and Auto space showed significant strength during the session. Although some profit booking came in post mid-session, it was short lived and a sharp rally was witnessed during the final couple of hours which made the benchmarks to close with more than 1.60% gains each. The mixed opening for the European markets had limited impact in the domestic arena. 

The BSE Sensex closed at 18,518.81 up by 308.23 points or by 1.69% and NSE Nifty closed at 5,551.45, higher by 91.60 points or by 1.68%. The BSE Midcap was at 6,863.78, up by 63.12 points or by 0.93% and the BSE SmallCap closed at 8,342.58, lower by 55.51 points or by 0.67%. The BSE Sensex touched intraday high of 18,568.48 and intraday low of 18,271.68.

On Friday, the U.S. markets closed higher as favourable payrolls report imbued positive tone among participants thus assisting the stocks to climb more than 1%, but a loss of momentum made them to pare some of the gains.

The S&P 500 rebounded after falling during the first four sessions for a cumulative loss of around 2%, but buyers came back following the news that nonfarm payrolls climbed by 244,000 and private payrolls climbed by 268,000 during April as against the expected increase of 185,000 and 200,000 respectively. This report overshadowed the headline unemployment rate, which came in at 9.0% to exceed the expected 8.8%.

Broad buying interest assisted the S&P 500 gain 1% to reclaim about half of what it had lost earlier during the week, but buying interest began to diminish by midday. Energy stocks attracted some interest after falling around 7% during the four previous sessions as participants moved to grab bargains. Market failed to hold the gains due to lack of leadership.

Industrial stocks (+0.8%) and materials stocks (+0.7%) closed as the top performers, but neither sector has much weight in the market. However, stocks were able to finish the session with modest gains after the S&P 500 came in contact with the neutral line. Investors continued their rotation into treasuries as stocks pared its gains.

The dollar continued to attract some interest and registered a gain of 1% for an impressive follow up to the 1.4% spike that it reported in the prior session. Commodities were pressurized taking the CRB Commodity Index down by 1.1%, which fed into a 9.0% drop for this week.

In the major indices, the Dow Jones Industrial Average (DJIA) closed with a gain of 54.57 or 0.43% at 12,638.74 while NASDAQ index finished higher by 12.84 points or 0.46% to 2,827.56. The S&P 500 (SPX) closed up by 5.1 points or 0.38% to 1,340.2.

The FIIs on Friday stood as net seller in equity and net buyer in debt. Gross equity purchased stood at Rs. 1990.80 Crore and gross debt purchased stood at Rs. 2207.20 Crore, while the gross equity sold stood at Rs. 2613.60 Crore and gross debt sold stood at Rs. 1601.40 Crore. Therefore, the net investment of equity and debt reported were Rs. (622.80) Crore and Rs. 605.80 Crore.

Top traded Volumes on NSE Nifty - Jaiprakash Associates Ltd. 11133278, Sterlite Industries (India) Ltd. 7611766, Reliance Communications Ltd. 7316062, Infrastructure Development Finance Company Ltd. 7210196, ITC Ltd. 7017587.

On BSE, total number of shares traded was 70.35 Crore and total turnover stood at Rs. 10048.52 Crore. On NSE, total number of shares traded was 53.69 Crore and total turnover stood at Rs. 11749.00 Crore.

On NSE Future and Options, total number of contracts traded in index futures was 622319 with a total turnover of Rs. 15994.84 Crore. Along with this total number of contracts traded in stock futures were 526932 with a total turnover of Rs. 13501.17 Crore. Total numbers of contracts for index options were 2956292 with a total turnover of Rs. 82903.18 Crore. and total numbers of contracts for stock options were 97582 with a total turnover of Rs. 2619.47 Crore.

Today, Nifty would have a support at 5,523 and resistance at 5,589 and BSE Sensex has support at 18,425 and resistance at 18,647.

Read more about: bse, nse, sensex, nifty
Story first published: Monday, May 9, 2011, 8:42 [IST]
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