DECEPTIVE

Once again the markets opened with a gap down, and touched their intraday low within the first half an hour of the trading session. The markets continued to trade in the same range, till the end of the first half of the trading session, but suddenly started recovering, after a statement from the deputy governor of RBI, indicated that, falling oil prices as well as declining core inflation and growth in India, will give the Reserve Bank of India room to adjust interest rates. The markets recovered very sharply and ultimately entered the positive zone and closed at the highest point of the day. The Nifty and the Sensex made a intraday recovery of 80 and 257 points respectively from the day's low and closed up by 6 and 23 points respectively. The market breadth also improved considerably, but still ended on a negative note, with 621 advances to 842 declines. On the sectoral front , the recovery was mainly led by the Banking sector, and almost all the sectors recovered from their day's low and closed in the positive zone, with a exception of the FMCG sector, which was the biggest looser of the day. On the individual stocks front, JP Associates, Siemens, Bank Of Baroda, LT & BPCL were the star performers for the day. On the institutional side, the picture was quite different, where FIIs turned net sellers to the tune of a massive 637 crores, while the DIIs were net buyers to the tune of 446 crores in the cash market.

On the derivatives side, the FIIs sold Index futures worth 348 crores and brought Stock futures worth 106 crores. Nifty future closed at 4840, with the discount narrowing down to just 8 points, along with a moderate increase in open interest. On the options side, the PCR increased to 1.08, along with a fall in the India VIX by 4.37%. On the Call options side, the 5200 call added the maximum open interest, followed by the 4800 & 4700 calls. On the Put options side, the 4900 put lost the maximum open interest, followed by the 5100 put, on the other hand the 4700 put added the maximum open interest followed by the 4800 put. The entire activity in the F&O space, indicates, some level of short covering owing to the sharp pullback, but not much has changed as it is evident from the FII sell figures, which indicate, every rise is used as a selling opportunity. On the currency front, the Rupee appreciated considerably and the USD-INR future closed at 55.73 for the day.

On the technical side, not much is to be read into today's up-move, and the levels to watch out for Nifty will be 4880, 4906 & 4968 on the upside and 4792, 4737 & 4704 on the downside.

On the international market front, the Asian and European markets have ended deep in the red and the U.S. markets are also trading in the negative zone, after data showed that factory orders dropped 0.6 percent in April, pointing to a deceleration in manufacturing and China’s non-manufacturing industries expanded at the slowest pace in more than a year.

On the energy futures front, the Brent and WTI crude futures are trading almost flat at 97.96 & 83.26 $/bbl respectively.