WAIT AND WATCH

The markets opened on a very dull note and continued to trade in the negative zone for the initial two hours of the first half of the trading session, but slowly recovered from this point onwards and traded with a strong positive bias till the end of the session and ultimately both the indices closed on a fairly positive note. The Nifty and the Sensex closed, up by 33 & 111 points respectively. The rise was mainly on the back of better than expected corporate results. The market breadth also recovered significantly and closed marginally negative with 705 advances to 793 declines. On the sectoral front, the Banking sector was the biggest gainer, followed by the Energy, Pharma & IT sectors, while the FMCG sector was the biggest loser for the day. On the individual stocks front, JP Associate, LT, TCS, Bharti Airtel & Axis bank were the top five Nifty gainers for the day, while Jindal Steel, Ambuja Cement, Bank of Baroda, Hero Motocorp & ITC were the top five Nifty losers for the day. On the institutional side, FIIs were net buyers to the tune of 242 crores, while the DIIs were net sellers to the tune of 138 crores in the cash market.

On the derivatives side, FIIs were net buyers in both Index and Stock futures, to the tune of 236 & 295 crores respectively. Nifty future settled at 5725 with 8 points premium to the spot, along with a considerable loss of open interest. On the Options side, PCR increased to 1.18, along with a massive fall in the India VIX by 10.32%. On the Call options side, with a exception of the 5800 call which added the maximum open interest, there was uniform loss of open interest from the 5000 to 6000 calls. On the Put options side, 5600 put added the maximum open interest, followed by the 5700 and 5800 puts, while there was uniform loss of open interest from the 5000 to 6000 puts. The entire activity in the Cash as well as the F&O markets, indicates sector specific buying continued for the second consecutive session in the cash market, along with hectic rollovers happening in the Index futures and options side, but a major fall in the India VIX will provide some temporary relief to the markets in the short term.

On the technical side, spot Nifty once again managed to conquer the 5700 mark, albeit on very thin volumes and managed to close above most of its short and long term moving averages for the 11^th consecutive session. Today’s move on very low volumes, will carry weightage, only if we see two or more consecutive moves like this , otherwise as of now, it should be considered on as a one off move just before the future expiry on Thursday. The levels to watch out for Nifty, will be 5747 & 5763 on the upside, and 5660, 5635 & 5616 on the downside. On the currency front, the Rupee snapped its two session losing streak on the back of dollar sales, likely on behalf of foreign investors who were looking to bid at the auction of unused limits in government and corporate debt, that was taking place later in the day. The partially convertible rupee, closed at 53.47, while the near month USD-INR future settled at 53.51, for the day.

On the international markets front, the Asian, markets have closed on a mixed note, while the European markets have closed in the red and the U.S. markets are also trading with losses, as investors eagerly watch the third quarter results. On the Energy futures front the Brent crude oil future is trading down by 0.20% at 109.89$/bbl and the WTI crude oil future is trading down by 0.73% at 89.75 $/bbl, while the Natural Gas future is also trading down by 4.16% at 3.46 $/MMBtu.