Pre Session Market Analysis for May 11, 2011

Posted By: Religare
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Pre Session Market Analysis for May 11, 2011
The key equity averages are likely to open positive as most of the Asian stocks are trading higher tracking a positive finish in the Wall Street and an advance in commodities like as oil and metal prices.

The MSCI Asia Pacific Index gained 0.4% at 138.53 with about five stocks gaining for every three that fell. Japan"s Nikkei 225 is trading higher by 0.50% at 9,868.2 as the yen weakened and companies announced that the earnings outlook has improved, thus stimulating confidence in pace of global economic recovery.

Shanghai Composite is down by 0.67% to 2,871.39 and Hang Seng Index fell 0.38% to 23,247.34. Separately, Seoul Composite and Jakarta Composite are trading higher by 0.43% and 0.37%, respectively. In the domestic arena, the markets are likely to follow the rout of global counterpart and trade range-bound with upside movement. Auto, Bankex and Metal pivotals will be in focus today.

Previous session

On Tuesday, the domestic bourses ended on a weak note after trading volatile throughout the session amidst stock specific movements. During the morning trade, most of the Asian stocks traded in the positive tracking a positive finish in the Wall Street overnight and optimism over Japanese corporate earnings.

Besides, the Japanese market declined as Greece"s credit rating was cut two levels by Standard & Poor"s, thus strengthening the yen and rising concerns about the strength of the recovery in the global economy. Soon after opening in the positive terrain, the benchmark indices dipped below the baseline and started trading range bound.

However, the benchmarks were seen rallying in the positive terrain. However, profit booking came in near the 5,600 Nifty resistance level. The benchmarks were again seen plunging into negative during the final couple of hours.

The Nifty took support near the 5,520 mark and pared some losses thereon. However, the market closed finally with modest losses. The participants are skeptical regarding the court verdict for the bail plea of five corporate big-shots involved in the 2G scam. The positive opening for the European markets had limited impact in the domestic arena.

The BSE Sensex closed at 18,512.77 down by 16.19 points or by 0.09% and NSE Nifty closed at 5,541.25, lower by 9.85 points or by 0.18%. The BSE Midcap was at 6,868.67, down by 3.01 points or by 0.04% and the BSE SmallCap closed at 8,363.96, higher by 21.16 points or by 0.25%. The BSE Sensex touched intraday high of 18,689.37 and intraday low of 18,429.06.

On Tuesday, the U.S. markets closed higher marking the third straight gains after falling for four consecutive sessions. This rally indicates the buy-the-dip mentality that traders have followed for the past couple of years.

Even though uncertainty prevailed over the future of monetary policy, the fiscal health of the eurozone states, growth and interest rates in China, and geopolitical tensions at various places across the World, the tone of trade was positive as participants were confident that buying stocks following a series of losses will result in gains.

Further, robust earnings have been a source of assistance for the climb from its market low, despite it can be conceded that reports in recent weeks have had less impact on the broad market action. On the corporate front, Microsoft (MSFT 25.67, -0.16) announced that it will pay $8.5 billion to acquire Skype, but this news failed to attract support for the stock. Additionally, announcement of retirement by Boston Scientific (BSX 7.02, -0.69) President and CEO, Ray Elliott dragged the stock to a new one-month low.

In the major indices, the Dow Jones Industrial Average (DJIA) closed with a gain of 75.68 or 0.6% at 12,760.36 while NASDAQ index finished higher by 28.64 points or 1.01% to 2,871.89. The S&P 500 (SPX) closed up by 10.87 points or 0.81% to 1,357.16.

The FIIs on Tuesday stood as net buyer in equity and debt. Gross equity purchased stood at Rs. 1935.90 Crore and gross debt purchased stood at Rs. 1224.80 Crore, while the gross equity sold stood at Rs. 1692.10 Crore and gross debt sold stood at Rs. 654.50 Crore. Therefore, the net investment of equity and debt reported were Rs. 243.80 Crore and Rs. 570.30 Crore.

Top traded Volumes on NSE Nifty - Jaiprakash Associates Ltd. 8295201, Reliance Communications Ltd. 6899280, Hindustan Unilever Ltd. 6735970, DLF Ltd. 4841641, NTPC Ltd. 4690543.

On BSE, total number of shares traded was 30.80 Crore and total turnover stood at Rs. 2460.70 Crore. On NSE, total number of shares traded was 63.03 Crore and total turnover stood at Rs. 8663.92 Crore.

On NSE Future and Options, total number of contracts traded in index futures was 444138 with a total turnover of Rs. 11456.91 Crore. Along with this total number of contracts traded in stock futures were 372498 with a total turnover of Rs. 9605.51 Crore. Total numbers of contracts for index options were 2570273 with a total turnover of Rs. 72285.01 Crore. and total numbers of contracts for stock options were 75149 with a total turnover of Rs. 1996.03 Crore.

Today, Nifty would have a support at 5,502 and resistance at 5,596 and BSE Sensex has support at 18,382 and resistance at 18,697.

Read more about: bse, nse, nifty, sensex
Story first published: Wednesday, May 11, 2011, 8:22 [IST]
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