HERE WE GO DOWN.

The benchmark indices opened on a flat note, but it was a start to a rollercoaster trading session, when the markets, after initially trading in the positive zone for the first hour of trade, entered the negative zone for the next one hour of trade, but recovered all their losses and  traded in the positive zone for the next two and a half hours, before sliding once again and closing near their lowest point of the day. The Nifty and the Sensex closed down by 30 and 110 points respectively. The market breadth was extremely negative, with 542 advances to 938 declines. On the sectoral front, the IT sector was the biggest loser, followed by the FMCG, Auto and Banking sectors, on the other hand the Pharma sector was the sole and biggest gainer for the day. On the individual stocks front, there were quite a few, like Bharti Airtel, Maruti, Dr. Reddy, Axis Bank and Bank of Baroda, which managed to outperform the markets. On the institutional side, the FIIs were net buyers to the tune of 257 crores, while the DIIs were net sellers to the tune of mere 41 crores in the cash market. 

On the derivatives side, there was hardly any activity, where FIIs brought Index futures worth 57 crores and sold Stock futures worth 96 crores. Nifty future settled at 5207, with 10 points premium to the spot, along with a moderate increase in open interest. On the options side PCR fell marginally to 0.95, along with a increase in the India VIX by 2.79%. On the Call option side, the 5300 call added the maximum open interest, followed by the 5200 & 5400 calls, on the other hand the 5600 call lost the maximum open interest, followed, by the 5500 & 5100 calls. On the Put option side, the 5200 put lost the maximum open interest, followed by the 5300 & 5400 puts, on the other hand the 5000 put added the maximum open interest, followed by the 4900, 4800 & 5100 puts. The entire activity in the F&O as well as the cash markets, shows the activity has become sector and stock specific, with the overall market sentiment turning negative with each passing session. There has been addition of fresh shorts, along with call writing at higher levels with corresponding put writing at lower levels, indicating the markets will become very range-bound in the day’s to come, unless there is any major event on the micro and macro-economic level.

On the technical side, Nifty has closed below the crucial level of 5250, for the third consecutive session with fall in volumes due to lack of participation, thus confirming the downtrend, which has been validated by the F&O data. Going forward the levels to watch out for Nifty will be, 5232 & 5267 on the upside, and 5178, 5147 & 5120 on the downside. On the currency front, out of the last nine sessions the Rupee fell for the seventh session tracking decline in domestic shares, after data showing steady core inflation cast doubts, whether the RBI will lower interest rates this month. The rupee settled at 55.31 for the day, while the near month USD-INR future, settled at 55.36 for the day.

On the international markets front, the Asian and the European markets have closed almost flat while the U.S. markets are trading with losses after the IMF cut its global growth forecast and a report showed that U.S. retail sales unexpectedly dropped. On the energy futures front, the Brent crude oil future is trading up by 1.15% at 102.58 $/bbl while the WTI crude future is trading up by 0.35% at 87.81$/bbl, but the Natural gas future is trading down by 2.96% at 2.79 $/MMBtu.