COLLAPSE

The benchmark indices opened on a mildly positive note, but within just half an hour of the opening, the markets lost all their gains and entered the negative zone and from this point onwards, there was no looking back and the markets corrected with ferocity, which gained strength as the session progressed and ultimately both the indices closed near their lowest point of the day. The Nifty and the Sensex closed down, by 36 and 104 points respectively. The market breadth turned extremely negative with 444 advances to 1037 declines. On the sectoral front, the Banking sector was the biggest loser, followed by the IT, Infra & Midcap sectors, while the FMCG and the Energy sectors were the only sectors, which managed to close in the green. On the individual stocks front, M&M, Power Grid, Cairn, Reliance industries and Sun Pharma were the top five Nifty gainers for the day, while Jindal Steel, PNB, IDFC, Axis Bank & DLF were the top five Nifty losers for the day. On the institutional side, FIIs were net buyers to the tune of 200 crores, while the DIIs were net sellers to the tune of a, whooping 501 crores in the cash markets.

On the derivatives side, the story was almost same where FIIs were net buyers in Index futures to the tune of 383 crores and net sellers in Stock futures to the tune of 550 crores. Nifty future settled at 5362 with just 12 points premium to the spot, along with a massive loss of open interest. On the Options side, PCR fell to 1.09, along with a rise in the India VIX by 1.92%. On the Call options side, the 5400 call saw the maximum call writing followed by the 5300 call, while there was uniform loss of open interest from the 4600 to 5600 calls. On the Put options side, with a exception of the 5300 put, there was uniform loss of open interest from the 4600 to 5600 puts. The entire activity in the cash as well as the F&O space indicates massive profit booking in the absence of any fresh triggers for the market, which has been aggravated by the rollovers in the futures segment.

On the technical side, Nifty closed at the crucial level of 5350, but the intensity of the fall, particularly in the large cap stocks in the last few sessions has put the uptrend in jeopardy, and without the support of these key components, Nifty will find it difficult to scale past the 5400 mark and resume the uptrend. Going forward the levels to watch out for Nifty, will be 5384, 5418 & 5437 on the upside and 5326, 5295 and 5278 on the downside. On the currency front, the Rupee fell to its lowest level in a week as oil refiners brought dollars and on growing concerns that the deadlock in the parliament will delay the passage of policy reforms. The Rupee finally settled at 55.69, while the near month USD-INR future settled at 55.68 for the day.

On the international markets front, the Asian markets closed on a mixed note, while the European markets have closed on a very strong note, and the U.S. stocks are trading in the green, after Apple, the world’s most valuable company rallied after winning a crucial patent case against it arch rival Samsung. On the energy futures front, both the Brent and WTI crude oil futures are trading down by 1.25% at 112.20 & 94.94 $/bbl respectively, while the Natural Gas future is trading down by 1.90 % at 2.68 $/MMBtu.