The
markets opened on a mildly positive note, and continued to trade within the
same range for the initial one hour of the trade, but gradually lost their
momentum and with just one hour left for the end of the day’s session, the
markets entered the negative zone and both the indices closed near their lowest
point of the day. The Nifty closed down by 4 points, while the Sensex closed up
by 2 points for the day. The market breadth turned extremely negative with 429
advances to 1050 declines. On the sectoral front, the Auto sector was the
biggest looser followed by the IT & Energy sectors, on the other hand the
FMCG sector was the sole and the biggest gainer for the day. On the individual
stocks front, there were quite a few like, Wipro, Dr. Reddy’s, ITC, Sun Pharma
& Coal India, which managed to outperform the markets for the day. On the
institutional side once again the FIIs were net buyers, to the tune of 475
crores, while the DIIs were net sellers to the tune of 266 crores in the cash
market.
On
the derivatives side, the FIIs brought Index futures worth 129 crores and sold
Stock futures worth a massive 411 crores. Nifty future settled at 5199, with
just 6 points premium to the spot, along with a considerable increase in open
interest. On the Options side, the PCR fell to 0.81, along with a massive fall
in the India VIX by 5.27%. On the Call option side, the 5500 call lost the
maximum open interest, followed by the 5400, 5600 & 5100 calls, on the
other hand the 5300 call added the maximum open interest, followed by the 5200
call. On the Put options side, the 5300 put lost the maximum open interest,
followed by the 5400 & 5100 puts, while the 5000 put added the maximum open
interest. The entire activity in the F&O as well as the spot markets
indicates, addition of shorts in the Index futures and options, along with
addition of fresh longs by FIIs in the spot market. Although there has been
considerable addition of shorts, the sharp fall in the India VIX, may provide
relief to the markets in the short term.
On
the technical side Nifty has broken the 5200 level, and closed below the 5250
level for the fourth consecutive session with slight fall in volume and most of
the technical indicators on the daily and weekly charts are in a sell mode. The
levels to watch out for Nifty, will be 5225 & 5257 on the upside and 5177,
5149 & 5117 on the downside. On the currency front, the Rupee rose, as the
dollar weakened ahead of the U.S. Federal Reserve chairman’s appearance before
the U.S. congress, but the dollar demand from the oil companies kept a check on
any sharp gains. The Rupee finally settled at 55.12, while the near month
USD-INR future settled at 55.18 for the day.
The two major factors which will guide the markets going forward are (i)
The presidential elections on Thursday, given widespread expectations the
government will announce long-stalled economic reforms, in what could boost
foreign investor sentiment and flows in Indian markets. (ii) On the economic
front , weaker than expected rainfalls during the monsoon period have raised
concerns about inflationary pressures and the potential impact on the rural
consumption.
On
the international markets front, the Asian markets have closed on a mixed note,
and the European markets have closed almost flat, while the U.S. markets are
trading with marginal gains. On the energy futures front, both the Brent and
WTI crude futures are trading with marginal gains at 104.09 & 89.20 $/bbl respectively and even the Natural gas future is trading up by 0.52% at 2.81 $/MMBtu.
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