BLOW OUT

What a explosive start, to the new series. It was a dream comeback for the market, which nobody would have thought in their wildest dreams, after the gloom surrounding the markets for the last three months. It was like the eagerly awaited monsoon rains, for the scorched markets. The markets opened with a gap up, on the back of clarity and assurance from the government regarding the rethinking on the draconian provisions of GAAR and secondly the optimistic vision of European Union Summit, which brought the much needed confidence, back in the markets. The markets gained strength with every passing hour and ultimately both the indices closed near their highest point of the day. The Nifty and the Sensex, closed up 130 & 439 points respectively. On the sectoral front, the Banking sector was the biggest gainer, followed by the FMCG, Midcap, Energy & Pharma sectors. On the individual stocks front, there were quite a few performers, but Jindal Steel, Tata power, Sterlite, Bhel, Maruti & Hindalco were the star performers for the day. On the institutional side, the FIIs were net buyers to the tune of a whooping 3047 crores, while the DIIs were net sellers to the tune of 251 crores in the cash market.

On the derivatives side, the FIIs brought Index futures worth 1568 crores and sold Stock futures worth 841 crores. Nifty future closed at 5297, with 18 points premium to the spot, along with a massive addition of open interest. On the options side PCR fell to 1.12, along with fall in the India VIX by 7.47%. On the Call options side, the 5400 call added the maximum open interest, followed by the 5500 & 5600 calls, on the other hand, the 5200 call lost the maximum open interest, followed by the 5100 and 4900 calls. On the Put option side, the 5200 put added the maximum open interest, followed by the 4800, 5300 & 5400 puts. The entire activity in the F&O space indicates addition of fresh longs in the index futures and call options along with put writing at higher levels, which has been validated by the massive buy figures  by the FIIs.

On the technical side, the massive rise in Nifty, has turned the market sentiment from a cautious mode to a strongly buoyant mode. Since Nifty has closed over most of its short and long term moving averages and a breakout seems to have happened on the daily and weekly charts along with the technical indicators  which are also supporting the markets, it remains to seen over the next two sessions, whether the markets will maintain the momentum or Friday's move will be  just a one off move. The levels to watch out for Nifty will be, 5313, 5348 & 5410 on the upside and 5216, 5154 & 5133 on the downside. On the currency front, the Rupee made a remarkable pullback and the USD-INR future finally settled at 56.05 for the week.

On the international market front, the Asian, European and the U.S. markets had the same story to tell, " winners all the way". On the energy futures front, the story was the same with both Brent and WTI crude futures closing up by 7.05% and 9.36% at 97.80 & 84.96 $/bbl respectively for the week, even Natural gas future closed up by 3.75% at 2.82 $/MMBtu for the week.