CAUTIOUS

The markets opened on a very flat note, after yesterday’s big fall and traded range-bound till the start of the second half of the trading session, but from this point the markets started recovering from their day’s low and ultimately closed near their day’s high till the end of the session. The Nifty and the Sensex closed up by 22 & 75 points respectively. The market breadth improved considerably and ultimately closed on a positive note with 825 advances to 654 declines. On the sectoral front, the Pharma sector was the biggest gainer, followed by the Banking, Auto & Media sectors. On the individual stocks front, Hindalco, Maruti, Tata Motors, Sesa Goa & Cipla were the top five Nifty gainers, while Rel Infra. Gail, Bhel, ONGC & Ultratech Cement were the top five Nifty losers for the day. On the institutional side, FIIs were net buyers to the tune of 248 crores, while the DIIs were net sellers to the tune of 98 crores in the cash markets.

On the derivatives side, FIIs were net sellers in Index future to the tune of 169 crores and net buyers in Stock futures to the tune of 202 crores. Nifty future settled at 5646, with 26 points premium to the spot, along with a considerable loss of open interest. On the Options side, PCR stood at 0.84, along with a fall in the India VIX by 5.08%. On the Call options side, the 5700 call added the maximum open interest, followed by the 5800, 5600 & 5900 calls. On the Put options side, the 5200 put added the maximum open interest, followed by the 5400, 5600 & 5500 puts, while the 5700 put lost the maximum open interest, followed by the 5100 & 5000 puts. The entire activity in the cash as well as the futures markets indicates some level of profit booking along with sector and stock specific buying in the cash as well as the futures market.

On the technical side, spot Nifty closed at 5620, after breaching the 5600 level on an intraday basis and finally it seems to have broken down from the trading range of the past thirteen sessions but tomorrow’s session will decide the trend. The technical indicators on the daily as well as the weekly charts are also indicating a downtrend, but today’s fall in the India VIX may limit the downside. The levels to watch out for Nifty will be 5635 & 5656 on the upside, and 5594, 5568 and 5553 on the downside. On the currency front, the Rupee rose today, but snapped two months of successive gains to fall in October as the euphoria over economic reforms petered out and the central bank kept rates on hold and now the global events are expected to determine the currency’s direction in the near term. The partially convertible Rupee finally closed at 53.80, while the near month USD-INR future settled at 54.08 for the day.

On the international markets front, the Asian markets have closed on a fairly positive note, while the European markets have closed in the red and the U.S. markets are also trading with losses after two consecutive days of closure. On the energy futures front, the Brent crude oil future is trading down by 0.22% at 108.86 $/bbl, while the WTI crude future is trading up by 0.65% at 86.24 $/bbl and the Natural Gas future is trading up by 1.06 % at 3.73 $/MMBtu.