GLOOMY

Once again the benchmark indices opened with a gap down, tracking their Asian peers as well as worst than expected results from the IT bellwether Infosys, made a perfect setting for a bad start for the markets and to make things worse the IIP data didn’t help either and the markets corrected severely, and touched their intraday lows at the start of the second half of the trading session, from that point, the markets tried to recover some of their losses, but in vain and ultimately both the Indices closed near their day’s low. The Nifty and the Sensex closed down by 71 and 257 points respectively for the day. The market breadth was extremely negative with 460 advances to 1001 declines. On the sectoral front, the IT sector was the biggest loser, followed by the Banking and Auto sectors. On the individual stocks front, JP Associate, ONGC, HeroMotocorp, Gail & BPCL managed to outperform the markets for the day. On the institutional side, FIIs were net buyers to the tune of 269 crores, while the DIIs were net sellers to the tune of a massive 538 crores in the cash market.

On the derivatives side, the scenario was worst, with FIIs turning net sellers in both Index and Stock futures to the tune of 416 and 480 crores respectively. Nifty future settled at 5251, with 16 points premium to the spot, along with a marginal increase in open interest. On the options side, the PCR fell to 0.97, along with a marginal increase in the India VIX by 1.75%. On the Call options side, the 5300 call added the maximum open interest, followed by the 5200, 5400 & 5100 calls, on the other hand the 5600 call lost the maximum open interest followed by the 5100 call. On the Put option side, the 5400 put lost the maximum open interest, followed by the 5200, 5300 & 4700 puts, while the 4900 put added the maximum open interest followed the 5000 put. The activity in the cash and the F&O space, indicates liquidation of cash positions, as well as addition of short positions on the options side, to take benefit of the sudden fall in the domestic markets along with the gloomy situation in the international markets.

On the technical side, the 5250 level, which was till yesterday thought of as a intermediate support, was taken out very easily and Nifty even tried to breach the 5200 level and finally closed below the 5250 mark with fall in volumes. Overnight the situation has turned from comfortable to cautious, well this is how the markets behave, expect the unexpected. Well the only ray of hope seems to be the sustained buying by the FIIs in the spot market. The levels to watch out for Nifty will be 5270, 5283 and 5304 on the upside and 5214, 5180 & 5146 on the downside. On the currency front the Rupee fell once again as local stocks were plumelled, while risk currencies such as the euro were hit by intensifying worries about the global economy. The rupee finally settled at 55.93, while the near month USD-INR future settled at 56.03 for the day.

On the international markets front, the Asian and the European markets have closed on a very negative note, and the U.S. markets are also trading on negative note, even after fall in the jobless claims was overshadowed by increasing concerns about global economic growth and corporate earnings. On the energy futures front, both the Brent and WTI crude futures are trading with marginal gains at 101.02 & 85.87 $/bbl respectively, while the Natural gas future is trading up by 1.26% at 2.88 $/MMBtu after a fall in the U.S. natural gas inventories.