DILEMMA

As expected the markets opened on a flat note, tracking its Asian peers, and continued to trade range-bound till the start of the second half of the trading session and with the just 45 minutes left for the end of the day's session, the markets briefly touched their intraday low, but smartly recovered to close near the day's high and ultimately both the indices closed almost flat. The Nifty and the Sensex closed up by 6 and 24 points respectively. The market breadth was negative with 698 advances to 746 declines. On the sectoral front, the Pharma sector was the biggest gainer, followed by the Banking and Midcap sectors, on the other hand the FMCG sector was the biggest looser of the day. On the individual stocks front, GAIL, Grasim, Tata Power, Power Grid and Siemens were the star performers for the day. On the institutional side, strangely the FIIs were net buyers to the tune of a mere 13 crores, while the DIIs were net sellers to the tune of a massive 355 crores in the cash market.

On the derivatives side, the FIIs brought Index futures worth, a whooping 800 crores and sold Stock futures worth 162 crores. Nifty future closed at 5126, with 5 points premium to the spot, along with massive loss in open interest. On the Options side, the PCR fell to 0.98, along with a fall in the India VIX by 6.21%. On the Call options side, the 5300 call lost the maximum open interest, followed by the 5400 & 4900 calls on the other hand the 5200 call added the maximum open interest, followed by the 5000 call. On the Put option side, the 5100 put added the maximum open interest, followed by the 4900 & 4800 puts, while the 5200 put lost the maximum open interest, followed by the 4700 put. The entire activity in the F&O space indicates rollover of positions to the next series, along with call and put writing in the out of money call and put options, just before the expiry. So far the rollover of positions is quite good and the Nifty July series is opening with considerable open interest and 21 points premium to the spot. On the currency front, the Rupee touched the intraday low of 57.20, but finally closed at 57.01, for the day, while the USD-INR future closed almost flat at 57.03 for the day.

On the technical side, once again Nifty managed to close above the 5100 level, but with decreasing volumes. Since Nifty has been stuck in this range for more than two weeks and it is trading on falling volumes, indicates, that a intermediate top formation might have taken place and market participants will be taking their profits off the table very soon. The levels to watch out for Nifty will be, 5138, 5155 & 5178 on the upside and 5097, 5093 & 5061 on the downside.

On the international market front, the Asian and the European markets have closed almost flat, while the U.S.markets are trading in the positive zone, even after after the data showed fall in the consumer confidence and manufacturing activity. On the energy futures front, the Brent crude future is trading up by 1.12% at 92.03 $/bbl while the WTI crude future is trading down by 0.39% at 78.85 $/bbl and the Natural gas future is trading up by 1.70% at 2.78 $/MMBtu.