AFFIRMATIVE

The markets opened on a very quite note and traded with a negative bias for the initial one hour of the trading session, but from that point onwards, the markets made a remarkable comeback and gained strength as the session progressed and ultimately both the indices touched their intraday highs till the end of the session and closed very near to their day’s high. The Nifty and the Sensex closed up by 43 & 131 points respectively. The market breadth was however evenly balanced with 769 advances to 729 declines. On the sectoral front the FMCG sector was the biggest gainer followed by the Banking, Pharma & IT sectors. On the individual stocks front, JP Associate, Sun Pharma, Cipla, Tata Power & ICICI Bank were the top five Nifty gainers while NTPC, Bhel, Power Grid, Cairn & Lupin were the top five Nifty losers for the day. On the institutional side there was very little participation, with FIIs turning net buyers to the tune of 183 crores and DIIs turning net sellers to the tune of 133 crores in the cash markets.

On the derivatives side, FIIs were net sellers in Index futures to the tune of 97 crores and net buyers in Index options to the tune of 150 crores, on the other hand they were net buyers in Stock futures to the tune of 257 crores. Nifty future settled at 5622, with just 7 points premium to the spot, along with a marginal decrease in open interest. On the Options side, PCR increased to 1.05, along with a fall in the India VIX by 2.21%. On the Call Options side, except the 5800 call which added the maximum open interest, there was uniform loss of open interest from 5000 to 6000 calls. On the Put options side, the 5500 put added the maximum open interest, followed by the 5600, 5400 & 5200 puts. The entire activity in Cash as market indicates stock and sector specific buying , while in the F&O space, there was unwinding of shorts on the Call options side accompanied by corresponding Put writing at lower levels, indicating the change in sentiment.

On the technical side, Nifty managed to close above the 5600 mark albeit on low volumes, paving the way for a short term bonceback that might be in the offing. Nifty must sustain at this level, at least for the next few sessions in order to make a meaningful comeback. The levels to watch out for Nifty will be 5646 & 5660 on the upside and 5563 , 5539 on the downside. On the currency front, the Rupee retreated from its two month low, hit early in the day and closed little changed as custodian banks stepped in to sell the dollar following late gains in the domestic share market. The partially convertible Rupee finally closed at 55.11, while the near month USD-INR future closed at 55.15 for the day.

On the international markets front, the Asian markets have closed on a positive note, while the European markets have closed almost flat, and the U.S. markets are trading almost flat, after yesterday’s gains as investors watch economic data while European finance ministers failed to agree on a debt-reduction package for Greece. On the Energy futures front, both the Brent and WTI crude oil futures are trading almost flat at 109.97 & 86.63 $/bbl respectively, while the Natural gas future is trading up by 0.82% at 3.86 $/MMBtu.