EDGY

The markets opened on a positive note, and touched their intraday high, within the first half an hour of the trade. The markets continued, to trade strongly till the first hour of the second half of the trading session, but the news of the possible downgrade by S&P spooked the markets, and the markets gave away all their gains, till the end of the session and finally closed in the negative zone. The Nifty and the Sensex closed down by 14 and 51 points respectively, for the day. The market breadth stayed marginally positive till the end of the session, with 769 advances to 693 declines. On the sectoral front, the FMCG sector was the only sector which closed in the green, while all the other sectors, almost closed almost flat or ended in the negative zone. On the individual stocks front, Tata Power, Bajaj Auto & Grasim, were the few stocks which managed to buck the trend. On the institutional side, surprisingly the FIIs were net buyers to the tune of 130 crores, while the DIIs were net sellers to the tune of 215 crores in the cash market.

On the derivatives side, the FIIs brought Index futures, worth 527 crores, and sold Stock futures worth a mere 42 crores. Nifty future closed at 5052, with just 2 points discount to the spot, along with a considerable fall in open interest. On the Options side, the PCR increased to 1.19, along with a big jump in the volatility index by 6.60%. On the Call options side, the 4800 call lost the maximum open interest, followed by the 4900 and 4700 calls, on the other hand, the 5300 call added the maximum open interest, followed by the 5200 & 5400 calls. On the Put options side, the 5100 put added the maximum open interest, followed by the 4600 & 4800 puts.The entire activity in the F&O space indicates liquidation of shorts in the futures, with corresponding call writing at higher levels, which once again indicates the panic among the participants, waiting to sell at the slightest signs of nervousness.So clearly the market participants are using every opportunity to build shorts in the system.

On the technical side, once again the Nifty managed to close above the 5050 level, but it remains to be seen, whether this level can be protected for the next few sessions. Nifty has to maintain the level of 5068, on a closing basis, in order to make a meaningful upmove, otherwise the short upmove will  fizzle out the same way, it has formed in  the last few sessions. The levels to watch out for Nifty will be, 5098, 5151 & 5189 on the upside and 5000, 4975 & 4957 on the downside. On the currency front, the Rupee depreciated once again and finally the USD-INR future closed at 55.92 for the day.

On the international market front, the Asian markets have closed on a strongly positive note, while the European markets pared all their gains and finally closed in the red and the U.S. markets are also trading in the red, after optimism over Spain's bailout plan, gave way to skepticism, whether it will succeed in halting the debt crisis.On the energy futures front, both Brent and WTI crude futures are trading down at 98.72 & 83.43 $/bbl respectively.