CAUTION

The markets opened on a negative note and continued to trade in the same range for the next two hours of the trading session, except for 20 minutes, when the markets, briefly entered the positive territory, before starting their one way downward journey and finally touching their intraday lows at the fag end of the trading session. The Nifty and the Sensex, closed down by 67 and 203 points respectively. The market breadth was extremely negative, with 429 advances to 1029 declines. On the sectoral front, Banking sector was the biggest looser followed by the Midcap and Auto sectors, on the other hand the IT sector was the only gainer for the day. On the individual stock front, Infosys, ACC & Cipla, somehow managed to buck the trend. On the Institutional side, FIIs were net buyers, to the tune of 106 crores, while the DIIs were net sellers to the tune of 283 crores in the cash market.

On the derivatives side, FIIs were net sellers in both Index and Stock futures to the tune of 92 and 245 crores respectively.Nifty future closed at 5054, with just 1 point discount to the spot, along with a considerable loss of open interest. On the Options side PCR marginally increased to 1.13, along with a jump in the India VIX by 5.54%. On the Call option side, the 5100 call added the maximum open interest, followed by the 5400 & 5300 calls, on the other hand the 5000 call lost the maximum open interest. On the Put option side, 5100 put lost the maximum open interest, followed by the 4900 and 5200 puts, on the other hand the 5000 put added the maximum open interest, followed by the 4800 put. The activity in the F&O space, clearly indicates, fresh shorts building up in the system.

On the technical side, Nifty managed to close above the crucial mark of 5050, once again, but it remains doubtful, how long it will be able to hold on to this level. On the candlestick charts, an evening star formation has taken place, along with confirmation from the other technical indicators, on the daily charts. This is a confirmed bearish reversal pattern. The levels to watch out for Nifty will be, 5114 & 5155 on the upside and 5017, 5006 and 4990 on the downside. On the currency front, the rupee depreciated once again and the USD-INR future closed at 55.83 for the day.

On the international market front, the Asian and the European markets have closed either flat or in the red, but the U.S.markets are trading on a firm note on the back of inflation and jobless data, fueling speculation that the Federal reserve will act to spur growth. On the energy futures front both Brent and WTI crude futures are trading on a firm note at 96.78 & 83.42 $/bbl.