AFFIRMATIVE

The markets opened on a very quite note, but as soon as the news of favorable outcome from the U.S. hit, the markets made a almost vertical ascent and kept on making new highs with every passing hour and ultimately closed near their highest points of the day. The Nifty and the Sensex closed up by 36 & 85 points respectively. The market breadth also remained positive with 927 advances to 573 declines. On the sectoral front, the Banking sector was the biggest gainer for the day, followed by the FMCG & IT sectors. On the individual stocks front, JP Associate, Bank of Baroda, PNB, DLF & IDFC were the top five Nifty gainers for the day, while Tata Power, Coal India, Bharti Airtel, Siemens & Reliance were the top five Nifty losers for the day. On the Institutional side, FIIs were net buyers to the tune of 728 crores, while the DIIs were net sellers to the tune of 197 crores in the cash market.

On the derivatives side, FIIs were net sellers in both Index futures and options to the tune of 122 & 562 crores respectively, while there was hardly any activity in the Stock futures and options side, where the FIIs were net buyers to the tune of mere 55 & 13 crores respectively. Nifty future settled at 5793, with 33 points premium to the spot along with a considerable increase in open interest. On the Options side, PCR stood at 0.94, along with a fall in the India VIX by 4.60%. On the Call options side, the 6000 call added the maximum open interest, followed by the 5900 call, while there was uniform loss of open interest from the 5200 to 5800 calls. On the Put options side the 5700 put added the maximum open interest, followed by the 5800, 5500 & 5900 puts, while the 5200 put lost the maximum open interest, followed by the 5000, 5400 & 5300 puts. The entire activity in the cash markets indicates sector specific buying, while on the F&O side there was some profit booking along with addition of longs on the call options side, while there was active put writing at higher levels.

On the technical, Nifty managed to break and close comfortably above the 5700 mark for the fourth consecutive session making a valid case for a short up-move, only if the global headwinds don’t play spoilsport. The levels to watch out for Nifty will be 5787 & 5815 on the upside and 5721, 5683 & 5652 on the downside. On the currency front, the Rupee strengthened for a second straight session as U.S. President Barack Obama’s re-election to a second term, boosted risk assets globally. The partially convertible Rupee finally closed at 54.20, while the near month USD-INR future settled at 54.38 for the day.

On the international markets front, the Asian markets have closed on a fairly positive note, while the European markets have closed deep in the red, and the U.S. markets are trading with heavy losses as investor focus returned to the U.S. Tax debate and Europe’s debt crisis, following the re-election of President Barack Obama. On the energy futures front, both the Brent and WTI crude oil futures are trading down by 3.35 & 4.01 % at 107.33 & 85.13 $/bbl respectively, while the Natural gas future is also trading down by 1.26 % at 3.57 $/MMBtu.