TREMULOUS

As expected, the markets opened with a gap down, tracking its Asian peers and touched their intraday lows within the first two hours of the trading session, but slowly started recovering for the next two hours of the trading and suddenly, the better than expected results from State Bank of India, added the much needed fillip to the market, and eventually Bank Nifty, pushed the markets into the positive zone and both the indices close at the highest point of the day. Nifty and the Sensex closed up by 21 and 82 points respectively. The market breadth recovered remarkably and closed with 622 advances to 838 declines. On the sectoral front the major contributors were Banking sector followed by the FMCG, but the rest of the sectors, either ended flat or in the negative zone. On the individual stocks front SBIN, Sesa Goa, Grasim, IDFC & SAIL were the star performers of the day. On the institutional side, the FIIs were net sellers to the tune of 249 crores, while the DIIs were net buyers to the tune of 149 crores in the cash market.

On the derivatives side, the FIIs sold Index futures to the tune of merely 20 crores, and brought stock futures worth 264 crores. Nifty future closed at 4889, with 3 points discount to the spot along with a considerable loss of open interest. On the options side the PCR, marginally increased to 0.95, along with a slight increase in the India VIX by 0.17%. On the Call options side, the 5100 call added the maximum open interest, followed by the 4700 and 4800 calls, while the 4900 call lost the maximum open interest, followed by the 5300 & 5600 calls. On the Put option side, the 4700 put added the maximum open interest, while the 5100 put lost the maximum open interest followed by the 4900 & 5300 puts. The entire activity in the F&O space indicates, that the markets rose mainly on the back of short covering in index futures and options, with no meaningful addition of longs, which is mainly due to the uncertainty surrounding the international markets.

On the technical side, although the intraday pullback created a bullish candle formation, but most of the indicators are still in sell mode, and the F&O data also suggests, the markets are still not out of the woods. Going forward the levels to watch out for Nifty will be 4936, 4977 & 5002 on the upside and 4816, 4799 & 4742 on the downside. On the currency front the rupee appreciated a bit and the USD-INR future closed at 54.54.

On the international markets front, the Asian, European and the U.S. markets have closed deep in the red, but the manufacturing data of April and home sales data, showed that the U.S. economic expansion is still on track. On the energy futures front, the  Brent Crude future was trading down by  0.33% at 107.14 $/bbl and the WTI crude future was trading down by 1.17% at 91.48 $/bbl.