UNCERTAIN

The markets continued their downward journey, after a pause on Thursday and once again opened on a somber note, but regained their lost ground in the first two hours and remained in the green for close to an hour, but started falling once again and the market breadth turned worse, as the session progressed and ultimately both the indices closed near their lowest point of the day. The market breadth was also very negative with 655 advances to 843 declines. The Nifty and the Sensex closed, down by 32 and 130 points respectively. On the sectoral front, the IT sector was the biggest loser of the day, followed by the Banking and Auto sectors. On the individual stocks front, ACC, Lupin, Ambuja Cement, JP Associate and Grasim were the top five Nifty gainers, while Infosys, Bharti Airtel, BHEL, IDFC & Wipro were the top five Nifty losers for the day. On the institutional side, FIIs & DIIs were net buyers to the tune of 201 & 188 crores respectively in the cash market.

On the derivatives side, the FIIs were net sellers in both Index and Stock futures to the tune of 288 & 280 crores respectively. Nifty future closed at 5686, with just 10 points premium to the spot, along with a considerable loss of open interest. On the Option side, PCR stood at 0.86, while the India VIX stayed the same. On the Call options side, the 5700 call added the maximum open interest, followed by the 5800 & 5900 calls, and on the Put options side, the 5500 put added the maximum open interest, followed by the 5700 & 5400 puts, while the 5800 put lost the maximum open interest followed by the 5900 put. The entire activity in the Cash as well as the F&O markets, indicates sector specific selling as well unwinding of longs with corresponding build up of shorts in the F&O markets.

On the technical side, Nifty is finding it hard to hold on to the elusive 5700 mark, for the sixth straight session and the constant downward slide with falling volumes and unwinding of longs, along with negative signals from the technical indicators, indicates that the bears are tightening their grip on the markets and its is only a matter of time, after which we will see all the major supports being taken out. To make things worse the economic indicators are getting worse on a y-o-y and m-o-m basis , indicating the slowdown is getting deeper and the effects of which, will be clearly visible in the corporate earnings season. Only one thing can help the markets stay afloat and that is liquidity and with several downgrades on the individual stocks front in the offing, value buying will emerge and liquidity will chase those stocks at much lower levels, so from a traders point of view, one should take selective calls with strict stop losses and from a investor point of view, buy on dips should be the strategy.  The levels to watch out for Nifty will be 5714 & 5752 on the upside and 5636, 5622 and 5581 on the downside. On the currency front, the Rupee edged lower on Friday, to post its biggest weekly loss in three and a half months, weighed down by the dollar demand from oil importers and also tracking losses in the domestic share market. The Rupee finally closed at 52.80, while the near month USD-INR future settled at 52.89 for the week.

On the international markets front, the Asian markets closed on a mixed note, while the European markets ended deep in the red, and the U.S. markets also closed with their biggest weekly loss since June as the IMF reduced its global growth forecasts and the projections from the AMD and Alcoa disappointed investors. On the Energy futures front, both Brent and WTI crude futures closed down by 0.94 & 0.23 % at 114.62 & 91.86 $/bbl respectively, while the Natural Gas future, closed up by 0.19% at 3.61 $/MMBtu.