SOMBRE

The markets opened on a dismal note, once again for the ninth consecutive session and continued to trade range-bound in the first half of the trading session, but at the start of the second half of the trading session, things became worse and the markets touched their intraday lows, within the next half an hour. The markets  continued to trade in the same range, till the end of the session and ultimately both the indices closed near their day’s low. The Nifty and the Sensex closed, down by 48 and 128 points respectively. The market breadth was also extremely negative with 594 advances to 883 declines. On the sectoral front, the Banking sector was the biggest loser, followed by the Pharma, Metals & Energy sectors, on the other hand the FMCG sector was the sole gainer for the day. On the individual stocks front, Bharti Airtel, Hind Unilver, TCS, ONGC & ITC were the top five Nifty gainers for the day,on the other hand BHEL, Axis Bank, Jindal Steel, Tata Steel & ICICI Bank were the top five Nifty losers for the day. On the institutional side, FIIs & DIIs were net sellers to the tune of 189 and 166 crores respectively in the cash market.

On the derivatives side also, the FIIs were net sellers in both Index and Stock futures to the tune of 387 & 514 crores respectively. Nifty future settled at 5253, with 27 points premium to the spot, along with a moderate loss of open interest. On the Options side, the PCR stood at 0.85, along with an increase in the India VIX by 2.53%. On the Call options side, the 5300 call added the maximum open interest, followed by the 5500, 5200 and 5400 calls, while on the Put options side, the 5000 put added the maximum open interest, followed by the 5200 and 4900 puts, on the other hand the 5300 put lost the maximum open interest, followed by the 4800 and 5500 puts. The entire activity in the cash as well as the F&O markets, indicates that while there was little participation in the cash markets, the selling in the Index and stock futures clears sums up the negative mood. On the options side, while there has been substantial call writing at higher levels, there has been no meaningful addition of shorts on put options side and there has been liquidation of longs on the Index futures side , in four out of the last five sessions, which suggests that although the markets are correcting, but there are no considerable short positions in the market and the selling has been mainly sector specific, which has led to a sustained fall in Nifty.

On the technical side, Nifty somehow managed to stick its neck above the 5200 mark, but the continuous selling in the key contributors to Nifty may lead some more panic reaction and take the Nifty to unreasonable levels. The levels to watch out for Nifty, will be 5242 & 5277 on the upside and 5202, 5189 & 5162 on the downside. On the currency front, the Rupee, fell to its lowest level in three weeks, weighed down by the losses in the domestic stocks and skepticism about the ECB’s ability to formulate a concrete plan to help the debt-laden euro zone economies. The Rupee finally settled at 55.90, while the near month USD-INR future settled at 56.12 for the day.

On the international markets front, the Asian markets have closed deep in the red, and the European markets have closed on a mixed note, while the U.S. markets are fluctuating between gains and losses on speculation that the ECB will act to tame the region’s debt crisis. On the Energy future’s side, the Brent crude oil future is trading down by 0.81% at 113.25 $/bbl, while the WTI crude futures is trading almost flat at 95.29 $/bbl and the Natural gas future is trading down by 2.30% at 2.78 $/MMBtu.