CLIFFHANGER

The markets opened on a very positive note, on the back of expectations of of some big ticket announcements, from the Finance minister as well as the RBI, and touched their intraday highs within the first two and half hours of the trading session. The markets continued to trade in the same range till the second half of the trading session, and with just one hour left for the end of the trading session, the big announcement came and it turned out to be a non event, to which the markets reacted aptly and pared all the gains to close near their lowest point of the day. The Nifty and the Sensex closed down by 31 and 90 points respectively.The market breadth, deteriorated considerably but finally managed to close marginally positive with 775 advances to 693 declines. On the sectoral front, the Banking sector was the biggest looser, followed by the IT and the Auto sectors. On the individual stocks front, Cairn, GAIL & Reliance Industries were among the few stocks, which managed to buck the trend. On the institutional side, both FIIs and DIIs were net buyers to the tune of 153 and 26 crores respectively in the cash market.

On the derivatives side, FIIs were net sellers both in Index and Stock futures, to the tune of 72 and 267 crores respectively. Nifty future closed at 5109, with six points discount to the spot, along with a moderate increase in open interest. On the options side, the PCR fell to 1.07, along with a jump in the India VIX by 4.81%. On the Call options side, the 5200 call added the maximum open interest, followed by the 5100 & 5300 call, on the other hand the 5000 call, lost the maximum open interest, followed by the 4900 & 5400 calls. On the Put options side, the 4900 put lost the maximum open interest, followed by the 5100 & 5000 puts, while the 5200 put was the only exception, which added the maximum open interest. The activity in the F&O space, indicates fresh short buildup on the futures side, accompanied by call writing at higher levels which clearly reflects the extreme pessimism in the market.

On the technical side, Nifty managed to hold on to the 5100 level for the fifth consecutive session on falling volumes. Nifty managed to come very close to the overhead resistance of 5199, but could not overcome it and fell from those levels and finally found its intraday support around the 5106 level. Since  there was no positive breakout today, the market participants will be keenly watching the critical levels, in the next few sessions, to take any directional calls. Going forward the levels to watch out for Nifty, will be 5177, 5225 on the upside and 5070, 5057 and 5006 on the downside. On the currency front the Rupee appreciated considerably after the RBI's announcement, and rose to a intraday high of 56.37, but finally ended 57.01, and the USD-INR future closed at 57.06 for the day.

On the international markets front, the Asian and the European markets have closed deep in the red and the U.S. markets are also trading with deep losses on concern's that the European summit will fail to tame the region's debt crisis. On the energy futures front, both the Brent and WTI crude futures are trading with marginal losses at 90.86 & 79.18 $/bbl, while the Natural gas future is trading up 2.36% at 2.73 $/MMBtu