WAIT AND WATCH

The markets opened on a very strong note, but gradually weakened in the second half and entered the negative zone by the time the European markets opened, but tried to recover the losses and somehow stayed in the positive zone till 3 p.m., but eventually lost all the gains in the last half an hour and both Nifty and Sensex ended down by 9 and 17 points respectively. The market breadth also turned negative with 660 advances to 792 declines. Most of the sectoral indices closed flat or marginally down. DLF, Bharti Airtel, SAIL and PNB were the star performers of the day. There was moderate participation from the institutional side, where both FIIs and DIIs were net buyers to the tune 237 crores and 71 crores in the cash market.

On the derivatives side FIIs brought Index futures worth 80 crores and sold Stock futures worth 125 crores. Nifty futures closed at 5247, with just 8 points premium to the spot, along-with a moderate fall in open interest. On the options side PCR fell to 0.92, along with 4.04% rise in the India VIX. On the Call options side, with a exception of 5000 and 5200 calls, there was considerable addition of open interest from 5100 to 5600 calls, while on the Put options side, with  a exception of 5000 put, there was considerable addition of open interest from 5100 to 5500 puts. The entire activity in the F&O space indicates some profit booking in the Nifty futures and at the same time addition of longs on the call side and put writing at higher levels. This action proves  that the market participants are willing to bet on the 5150 level , for going long on the Nifty.

On the technical side, spot Nifty crossed the 5250 and 5273 resistance levels, before closing at  and 5239 for the day, validating the action in the F&O space. The levels to watch out for Nifty will be 5270, 5301 & 5323 on the upside and 5213,5195 & 5163 on the downside. The rupee depreciated further and the USD-INR futures closed at 53.27.

On the international market side the European markets have closed in the red and the U.S. markets are also trading in the red on the back of worse than expected unemployment figures from the Eurozone, particularly Germany and also from the U.S. On the energy futures side both, Brent and WTI crude futures are trading lower by 1.12% and 0.79% at 118.32 and 105.32 $/bbl respectively, on the back of rise in U.S. crude oil inventories for the week.