TOUGH TIMES AHEAD

Once again the markets opened on a negative note, but after the initial one hour of trade, the markets started drifting swiftly and reached very close to the intraday low within the next two hours of the trade, from there onwards it was a rollercoaster ride for the markets, with a series of ups and downs and eventually the markets touched the lowest point of the day at the start of the second half of the trading session, but could not recover much from those levels, till the end of the session. Nifty and the Sensex closed down by 25 and 78 points respectively. The market breadth was negative with 507 advances to 934 declines. On the sectoral front there was hardly any activity, but the Banking sector was the biggest looser, followed by the Midcap, Infra and Auto sectors. On the individual stock front, GAIL, Ranbaxy, IDFC and M&M bucked the trend. On the institutional side, FIIs were net sellers to the tune of 361 crores, while the DIIs were net buyers to the tune of 168 crores in the cash market.

On the derivatives side FIIs sold Index futures, worth 812 crores and brought Stock Futures worth 177 crores. Nifty future closed at 4814, with 22 points discount to the spot, along with a considerable loss of open interest. On the Options side, the PCR increased to 1.02, along with a massive jump in the India VIX by 11.23%. On the Call option side, the 4800 call added the maximum open interest followed by the 4700 call, while the 5300 call lost the maximum open interest, followed by the 5200 & 4900 calls. On the Put option side, there was considerable loss of open interest from 4800 to 5600 puts, with a exception of the 4700 put, which added the maximum open interest. The entire activity on the F&O space, indicates heavy selling by the FIIs in cash and futures, which is increasing the discount on Nifty and at the same time massive call writing at the lower levels is making matters worse. On the currency front, the rupee depreciated further and the USD-INR future finally closed at 56.08 for the day.

On the technical side , once again Nifty has closed below the crucial support levels, and inspite of being in the oversold zone, there seems to be no relief in sight, because of the rupee depreciation and the microeconomic factors.

On the international market front, both the Asian and European indices have closed deep in the red, and the U.S. markets are also trading in the red , sending the Dow Jones Industrial Average to the lowest  level in 2012, on a closing basis, amid concerns that Greece may leave the Euro. Stocks fell even after a report showed that demand for new U.S. homes, increased more than forecast in the month of April. On the energy futures front both Brent and WTI crude down by 2.11% & 2.25% at 106.12 and 89.78 $/bbl respectively.