The markets opened on a strong negative note, tracking their European and U.S.peers, and stayed range bound till the second half of the trading session, but the real crack appeared around 2.30 p.m. when the markets touched the lowest point of the day and could not recover from those levels and ultimately both the indices closed near the lowest point of the day. The Nifty and the Sensex closed down by 51 and 151 points respectively. The market breadth was extremely negative with 429 advances to 1046 declines. There was across the sector selling, but the major cuts came from the Banking and Auto sector followed by the Midcap and Energy sector, the only exception was the IT sector which ended up in the green, mainly on the back of depreciating rupee. Asian paints, Hind Unilever and Wipro were the only performers of the day.The negative breadth was also reflected on the institutional side, where FIIs were net buyers to the tune of merely 75 crores, while the DIIs were net sellers to the tune of 347 crores in the cash market.
On the derivatives side also, the FIIs were net sellers in both Index and Stock Futures to the tune of 237 and 216 crores respectively. Nifty futures closed at 5200, with just 12 points premium to the spot, along-with a moderate increase in open interest. On the options side the PCR marginally increased to 0.98, with a corresponding increase of 3.83% in the India VIX. On the Call options side there was considerable increase in open interest from 5000 to 5600 calls, while on the Put options side, there was considerable shedding of open interest from 5200 to 5600 puts, with a exception of 5100 put which added the maximum open interest followed by the 5000 put. The entire activity in the F&O space , shows how the entire scenario has changed within a single trading session, where the participants tend to go short on the slightest signs of weakness. Nifty futures added shorts, which was accompanied by massive call writing at all levels. To make matters worse there is no dearth of negative news flow from the international markets.
On the technical side, the 5150 level has still held strong and the levels to watch out for Nifty will be 5210, 5234 & 5246 on the upside and 5173, 5158 & 5136 on the downside. The rupee hit its 4 - month low and the USD-INR futures closed at 53.71.
On the international front, the European markets have closed in the red, on the back of worst than expected housing and services data and the U.S. markets are also trading in the red, because the unexpected fall in the ISM non-manufacturing figures have overshadowed the unexpected fall in jobless claims data. On the energy futures front both the Brent and WTI crude futures are trading down by 1.71% and 2.53% , at 116.58 & 102.56 $/bbl respectively.
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