HERE WE GO DOWN.

The markets opened after a long holiday, with a gap down, on the back of deep cuts in the Asian markets. The markets stayed deep in the red, throughout the day and ultimately both Nifty and Sensex closed in the red, down by 88 and 263 points respectively. The only star performers of the day, were Ranbaxy & Dr. Reddy. The market breadth was extremely negative with 493 advances to 1011 declines, which was a result of across the sector selling by the FIIs and DIIs. The FIIs and DIIs were net sellers to the tune of 269 crores and 106 crores respectively, in the cash market. On the derivatives side, FIIs were net sellers both in Index and Stock futures, to the tune of 1092 and 261 crores respectively. Nifty futures closed at 5253, with 19 points premium to the spot, and a moderate fall in open interest. On the options side the PCR fell to 0.91.On the Call options side, with a exception of 5000 call, there was considerable addition of open interest from 5100 to 5600 calls, on the Put options side with a exception of 5000 and 5100 puts, there was considerable shedding of open interest from 5200 to 5600 puts. The entire activity in the F&O space indicates massive call writing for the second consecutive session, along with profit booking in , in-the money puts. Meanwhile the India VIX shot up sharply by 8.24% confirming the extreme volatility and indicating there may be further downside. On the technical side , all the indicators are in a sell mode, while Nifty closed below its major support at 5260, the levels to watch out for Nifty, will be 5291 & 5308 on the upside, and 5203,5190 & 5140 on the downside. On the international front U.S. markets are trading in the red, while the European markets closed almost flat. The major cause of market fall seems to be worse than expected inflation data from China , leaving little room for the central bank to cut rates and ultimately compromising on growth.