INFLECTION POINT

The markets opened a positive note, and touched their intraday highs at the start of the second half of the trading session, but from that point onwards, the markets lost all their gains within the next one hour and entered the negative zone to touch their intraday lows. The markets stayed in the negative zone, for almost half an hour and were able to recover and close almost flat. The Nifty and the Sensex closed, up by 3 and 126 points respectively. The market breadth was extremely negative, with 681 advances to 818 declines. On the sectoral front, the FMCG sector was the biggest gainer, followed by the IT, Auto and Pharma sectors. On the individual stocks front, Tata Motors, Hind Unilever, Infosys, ITC & TCS were the top five Nifty gainers for the day, Jindal Steel, Tata Power, Rel Infra, DLF & Hindalco were the top five Nifty losers for the day. On the institutional side, both the FIIs and DIIs were net buyers to the tune of 308 and 40 crores respectively in the cash market.

On the derivatives side, the FIIs were net buyers in Index futures to the tune of 279 crores, and net sellers in Stock futures to the tune of 166 crores respectively. Nifty future settled at 5382, with16 points premium to the spot, along with a moderate fall in open interest. On the options side, the PCR marginally increased to 1.16, along with a marginal increase in the India VIX by 0.25%. On the Call options side, the 5300 call added the maximum open interest, followed by the 5400 & 5500 calls, while the 5100 call lost the maximum open interest. On the Put options side, the 5400 put added the maximum open interest, followed by the 5300 & 5500 puts, while the 5100 put lost the maximum open interest, followed by the 5000 & 4900 puts. The entire activity in the cash as well as the futures markets, indicates addition of fresh longs along with profit booking in the Index future and options side.

On the technical side, Nifty has once again managed to close, comfortably above the 5350 mark, for the third consecutive session and after consolidating in this range for the last eight sessions and trading above most of its short and long term moving averages. Nifty seems to be well on its way, towards a higher trajectory. The levels to watch out for Nifty will be 5397, 5420 & 5456 on the upside and 5338, 5311 & 5282 on the downside. On the currency front, the Rupee gained marginally on the back of Euro’s gains and a report by a government panel which forecasted a lower current account deficit, but the gains were limited as high global crude prices sparked demand for dollars. The rupee settled at 55.73, while the near month USD-INR future settled at 55.80 for the week.

On the international markets front, the Asian and the European markets closed with decent gains, and the U.S. markets also rallied on the back of mainly two reasons (i) Better than expected durable goods data, signaling that the U.S. economy is strengthening after a second quarter slowdown. (ii) Germany backed the ECB’s bond buying plan. On the energy future’s front, the Brent crude oil Future settled at 113.71 $/bbl, down by 1.35%, while the WTI crude oil future settled at 96.01 $/bbl, up by 0.43% and the Natural gas future settled at 2.71 $/MMBtu, down by 0.18%.