CONSOLIDATION ??

The markets opened on a flat note and traded in the same range for the first two and half hours of the trade, until the news of downward revision of the Indian economic outlook by the S&P hit the markets and as a knee jerk reaction, the markets reacted sharply, with both the indices, touching the lowest point of the day within the next fifteen minutes and stayed at those levels for the next one hour, but ultimately tracking their Asian and European peers, the markets eventually started recovering from the lows, but were unable to recover the losses till the end of the session, eventually both Nifty and Sensex closed down by 21 and 56 points respectively. The market breadth was extremely negative with 465 advances to 1005 declines. On the sectoral front, the IT sector was the worst performer followed by the Midcap and banking sector, while the FMCG sector was the only performer of the day. Sterlite, Heromotocorp and SesaGoa were the top three performers of the day. On the institutional side the FIIs were net sellers to the tune of 341 crores while the DIIs were net buyers to the tune of merely 41 crores in the cash market.

On the derivatives side, FIIs sold Index futures worth 315 crores and brought Stock futures worth 218 crores.Nifty futures closed at 5198, 4 points discount to the spot along-with a considerable loss in open interest, which is quite obvious at the end of the series, when active rollovers happen. On the options side PCR increased slightly to 1.03, along with a slight fall in the India VIX by 1.61%. On the Call option side, with a exception of 5100 and 5300 calls, there was shedding of open interest from 5000 to 5600 calls, while on the Put option side with a exception of 5100 put, there was considerable loss of open interest from 5000 to 5600 puts. Today's activity in the F&O space indicates call and put writing in all the out-of money calls & puts, which is quite normal at the end of the series. The only solace from the entire data, comes from the fact that unlike the previous four month series,  the May series is not opening with a unusually high premium. 

On the technical side Nifty has consolidated, near the 5150 level, for three consecutive sessions, which indicates some sort of base formation and augurs well for a trend change. The levels to watch out for Nifty, will be 5238, 5256 & 5275 on the upside and 5166,5123 & 5086 on the downside.The rupee ended with modest gains, with the USD-INR futures closing at 52.58.

On the international market front the European markets have closed comfortably in the green on the back of mixed economic data, while the U.S. markets are trading comfortably in the green on the back of robust corporate results and the Federal reserves statement, that growth will gradually accelerate and the benchmark rates have been kept unchanged at 0.25.

Meanwhile the Brent and WTI crude are trading flat at 118.64 and 103.97 $/bbl on the back of rise in U.S. crude oil inventories.