SCARY

The markets opened with a gap down, tracking its Asian peers and the situation turned worse when the markets touched their lowest levels, within the first half of the trading session, but slowly   the markets started to recover in the second half and by the time the most eagerly awaited announcement on GAAR provisions came, the markets had recovered  some of their losses and the positive news led the markets, all the way up into the positive zone and ultimately both Nifty and Sensex closed up by 27 and 82 points respectively. The extremely negative market breadth, remarkably turned positive by the end of the session with 759 advances to 693 declines. The gains were led by Banking sector, followed by the Infrastructure, Auto and Metal sector, on the other hand, FMCG sector was the under-performer of the day. The star performers of the day were BHEL, BPCL, LT, Jindal Steel & DLF. On the institutional side, FIIs turned net sellers to the tune of 631 crores, while DIIs were net buyers to the tune of 274 crores in the cash market.

On the derivatives side the FIIs were net sellers both in the Index and Stock Futures, to the tune of 59 and 591 crores respectively. On the options side PCR stayed at 0.98, along with a fall in the India VIX by 4.26%. On the Call options side, with a exception of 5500 call, there was massive addition of open interest from 5000 to 5600 calls, while on the Put options side there was considerable shedding of open interest from 5000 to 5600 puts. Nifty futures closed at 5126, with just 9 points, premium to the spot, along-with a moderate fall in open interest. The entire activity in the F&O space, indicates massive call writing at all levels in the market, which shows that the markets are still not out of the woods and every rise will be used as a selling opportunity.

On the technical side,Nifty managed to close above the psychological mark of 5050, but it remains to be seen how Nifty will cover the two gaps, created on its way down, in order to make the up-move more credible. The level to watch out for Nifty will be 5162, 5208 and 5235 on the upside and 5050, 5026 & 4939 on the downside.

On the international markets front, except FTSE, all the European markets have closed flat on the back of, mixed economic data and election results, while the U.S. markets are trading in the green. On the energy futures front both Brent and WTI crude are trading down by 0.21% and 0.76% at 112.94 and 97.74 $/bbl respectively.