DECEPTIVE

The markets opened on a fairly positive note, tracking their Asian peers, but lost their momentum after the initial one and a half hours of trade and continued to trade range-bound throughout the day and with just half an hour left for the end of the day’s session, the markets made a smart pullback and ultimately both the indices ended up almost flat. The Nifty and the Sensex closed, up by 12 & 33 points respectively. The market breadth was negative with 659 advances to 827 declines. On the sectoral front, the FMCG sector was the biggest gainer for the day, followed by the Pharma and Auto sectors. On the individual stocks front, Lupin, Tata Power, Cairn, Ranbaxy & LT were the top five Nifty gainers for the day, while DLF, Ambuja Cement, GAIL, ACC & TCS were the top five Nifty losers for the day. On the institutional side, in a stark contrast, FIIs were net buyers to the tune of a mere 36 crores, while DIIs were net sellers to the tune of 248 crores in the cash market.

On the derivatives side, the FIIs were net buyers, in both Index and Stock futures to the tune of mere 197 & 37 crores respectively. Nifty future settled at 5669, with just 9 points premium to the spot, along with a moderate loss of open interest, for the 8^th consecutive session. On the Options side, PCR stood at 0.90, along with a fall in the India VIX by 2.57%. On the Call options side, with the exception of the 5800 & 5400 calls, which added the maximum open interest, there was uniform loss of open interest from the 5000 to 6000 calls. On the Put Options side, the 5500 put added the maximum open interest, followed by the 5700 & 5600 puts. The entire activity in the cash as well as F&O markets indicates, complete lack of participation from the market participants, in the absence of which the markets are directionless right now and at the same time continuous fall in the India VIX, indicates markets are not expecting any major activity in the days to come and may trade range-bound for few more sessions.

On the technical side, spot Nifty settled at 5660, with a sharp fall in volume and broke yesterday’s low, indicating that although it may look like a lackluster market, the undercurrent is getting weaker day by day and we will see new lows in the day’s to come. The levels to watch out for Nifty, will be 5684 & 5700 on the upside and 5620, 5596 & 5584 on the downside. On the currency front, the Rupee remained unchanged today, as the positive impact from the gains in the Euro after Moody’s affirmed Spain’s investment grade rating was offset by dollar demand from oil and defence related companies. The partially convertible rupee finally settled at 52.87, while the USD-INR future settled at 52.96 for the day.

On the international markets front, the Asian and the European markets have closed on a fairly positive note and the U.S. markets are also trading with modest gains as jump in housing starts overshadowed disappointing results from IBM & Intel Corp. On the Energy futures front, both the Brent and WTI crude futures are trading with losses at 113.31 & 92.38 $/bbl respectively, on the back of unexpected jump in the weekly U.S. crude oil inventories, while Natural Gas future is trading up by 0.48% at 3.45 $/MMBtu.