Pre Session Market Analysis for May 16, 2011

Posted By: Religare
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Pre Session Market Analysis for May 16, 2011
The key equity averages are likely to open negative as most of the Asian stocks are trading lower on concern of impact of Greece"s debt crisis of global economy, thus dragging the benchmark index to the highest three-day fall since Japan"s Earthquake.

The MSCI Asia Pacific Index fell 1.2% at 134.56 with about four stocks falling for that gained. Further, Japan"s Nikkei 225 is trading lower by 0.63% at 9,587.85 as Goldman Sachs Group Inc. degraded rating on the country"s equities. Shanghai Composite is up by 0.13% to 2,874.85 and Hang Seng Index fell 1.04% to 23,034.07.

Seoul Composite and Jakarta Composite are trading lower by 0.54% and 0.50%, respectively. In the domestic arena, the markets are likely to follow the rout of global counterpart and trade range-bound with downside movement. FMCG, HC and Metal pivotals will be in focus today.

Previous Session

On Friday, The domestic bourses ended the last trading session of the week on a cheerful note after having dramatic swings throughout. Significant buying was seen among the FMCG, Metal and Healthcare sapce. During the morning trade, most of the Asian stocks traded lower despite a positive finish in the Wall Street as investors sentiment was dampened by the poor company results from Japan that were impacted by nation"s worst earthquake.

China"s decision to increase reserve ratios for its largest lenders raised concerns over slow down in the global economic growth, thereby dampening the morning sentiment. After opening in the positive terrain, the benchmark indices dipped below the baseline. However, it surged in the positive terrain soon and started journeying northwards.

As the day progressed, the benchmarks were seen making fresh intraday highs. The sentiment was boosted by the outcome of the assembly poll results of five states, wherein central ruling party Congress or its allies remained victorious in most of the places.

Although a sharp decline was witnessed during the final thirty minutes due to profit booking, the market managed to hold on most of their gains till the end. The benchmark sensex was seen swinging more than 600 points during the session. The positive opening for the European markets had limited impact in the domestic front.

The BSE Sensex closed at 18,531.28 up by 195.49 points or by 1.07% and NSE Nifty closed at 5,544.75, higher by 58.60 points or by 1.07%. The BSE Midcap was at 6,902.58, up by 58.42 points or by 0.85% and the BSE SmallCap closed at 8,368.22, higher by 32.79 points or by 0.39%. The BSE Sensex touched intraday high of 18,724.54 and intraday low of 18,280.70.

On Friday, the U.S. markets closed lower due to a rebound in the dollar pressurised the stocks, however the market registered a weekly loss, which was negligible. Initially the tone of trade was positive, while the sentiment abroad was not supportive despite some solid economic data out of Europe and Asia. Especially, Germany's first quarter GDP grew at a seasonally adjusted 1.5%, while France"s first quarter GDP growth came at 1%.

Further, on the Asian front, Hong Kong announced that its economy grew at an annualized rate of 2.8% in the first quarter. Back on the US front, the April Consumer Price Index grew by 0.4% and Core CPI grew by 0.2%.

This data met with a muted response initially, but slowly thereafter the dollar began to work its way out of the red and paused at the flat line, but began to rally by mid-morning. This rally took the Dollar Index to a one-month high before it eased back to finish the trading day with a 0.8% gain. Financials faced most of the selling pressure and closed lower by 1.5% as banks were some of the weakest performers in the sector.

In the major indices, the Dow Jones Industrial Average (DJIA) closed with a loss of 100.17 or 0.79% at 12,595.75 while NASDAQ index finished lower by 34.57 points or 1.21% to 2,828.47. The S&P 500 (SPX) closed down by 10.88 points or 0.81% to 1,337.77.

The FIIs on Friday stood as net seller in equity and net buyer in debt. Gross equity purchased stood at Rs. 1,602.50 Crore and gross debt purchased stood at Rs. 1,275.20 Crore, while the gross equity sold stood at Rs. 2,479.20 Crore and gross debt sold stood at Rs. 1,155.10 Crore. Therefore, the net investment of equity and debt reported were Rs. (876.70) Crore and Rs. 120.10 Crore.

Top traded Volumes on NSE Nifty - Jaiprakash Associates Ltd. 12,126,750, Infrastructure Development Finance Company Ltd. 8,989,910, Hindalco Industries Ltd. 7,199,317, ITC Ltd. 7,068,209, Housing Development Finance Corporation Ltd. 6,914,124.

On BSE, total number of shares traded was 26.00 Crore and total turnover stood at Rs. 2,805.92 Crore. On NSE, total number of shares traded was 54.52 Crore and total turnover stood at Rs. 10,632.82 Crore.

On NSE Future and Options, total number of contracts traded in index futures was 768,213 with a total turnover of Rs. 19,879.29 Crore. Along with this total number of contracts traded in stock futures were 546,832 with a total turnover of Rs. 14,221.33 Crore. Total numbers of contracts for index options were 4,345,033 with a total turnover of Rs. 121,989.04 Crore. and total numbers of contracts for stock options were 123,255 with a total turnover of Rs. 3,284.04 Crore.

Today, Nifty would have a support at 5,488 and resistance at 5,571 and BSE Sensex has support at 18,345 and resistance at 18,623.

Read more about: nse, bse, nifty, sensex
Story first published: Monday, May 16, 2011, 8:32 [IST]
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