CONSOLIDATION

The markets opened on a mildly positive note, and continued to trade range-bound for the initial one and a half hours of the trading session, but from this point onwards the markets made a almost vertical ascent and traded with a mildly positive bias till the end of the session and ultimately both the indices closed with modest gains near their day’s high. The Nifty and the Sensex closed up by 14 & 49 points respectively. The market breadth was extremely negative with 603 advances to 903 declines. On the sectoral front, there was hardly any activity, with most of the sectors closing either with modest gains or losses. On the individual stocks front, M&M, IDFC, Hero Motocorp, HDFC & Lupin were the top five Nifty gainers for the day, while Dr. Reddy, Bank of Baroda, PNB, SBIN & Ranbaxy were the top five Nifty losers for the day. On the institutional side, FIIs were net buyers to the tune of 551 crores, while DIIs were net sellers to the tune of mere 35 crores in the cash market.

On the derivatives side, FIIs were net buyers in Index futures, to the tune of 904 crores, while they were net sellers in Stock futures, to the tune of 731 crores. Nifty November future settled at 5747, with a massive 42 points premium to the spot, along with a considerable addition of open interest. On the Options side, PCR increased to 1.07, along with a fall in the India VIX by 1.39%. On the November Call options side, the 5400 call added the maximum open interest, followed by the 5900, 5700 & 6000 calls, while on the November Put options side, the 5300 put added the maximum open interest, followed by the 5600 & 5400 puts. The entire activity in cash market indicates that the buying was stock or sector specific, while in the F&O markets it was mainly rollover activity, but the huge premium in Nifty future seems to be unsustainable in relation to the PCR.

On the technical side, once again spot Nifty managed to sneak past the 5700 mark, on very low volumes and it is to be noted that Nifty has consolidated in this range of close to two weeks and is still trading above most of its short and long term moving averages, giving a notion that things might turn around, but the extremely low volumes, market breadth and F&O data suggest the other way around. The levels to watch out for Nifty will be 5720 & 5735 on the upside and 5687, 5666 & 5627 on the downside. On the currency front, the Rupee rose today, as a revival in global demand for risk prompted foreign banks to sell dollars but dollar demand from oil refiners limited bigger gains. The partially convertible rupee finally closed at 53.56, while the near month USD-INR future settled at 53.64 for the day.

On the international markets front, the Asian markets closed on a very positive note, while the European markets have closed on a mixed note, and the U.S. markets were initially trading with losses on the back of data, which showed Americans signed fewer contracts than forecast in September to purchase previously owned homes, but rose later on the back of better than estimated jobless claims and corporate earnings data. On the Energy futures front, both Brent and WTI crude oil futures are trading almost flat at 108.28 & 85.79 $/bbl respectively, while Natural gas future is trading down by 0.57% at 3.43 $/MMBtu.