GLOOM

Once again the markets opened on a very flat note, and traded with a positive bias throughout the trading session, but with just one hour left for the end of the trading session, the markets fell almost vertically and ultimately both the indices closed down by 1.0% at their lowest point of the day. The market breadth turned extremely negative with 483 advances to 1021 declines. On the sectoral front, the FMCG sector was the biggest loser followed by the Banking, Auto, Energy & Media sectors, while the IT sector was the sole sector which managed to stay in the green. On the individual stocks front, Bharti Airtel, Infosys, Dr. Reddy, ONGC & Jindal Steel were the top five Nifty gainers for the day, while IDFC, DLF, PNB, Tata Motors, Icici Bank were the top five Nifty losers for the day. On the institutional side, FIIs were net buyers to the tune of 510 crores while DIIs were net sellers to the tune of 375 crores in the cash market.

On the derivatives side, FIIs were net sellers in Index futures to the tune of 726 crores and net buyers in Index options to the tune of a massive 1489 crores. On the other hand FIIs were net buyers in Stock futures to the tune of 278 crores and net sellers in Stock options to the tune of 120 crores. Nifty future settled at 5580 with just 6 points premium to the spot along with a massive loss of open interest. On the Options side, PCR fell to 0.97, along with an increase in the volatility index by 4.44%. On the Call options side, the 5500 call added the maximum open interest, followed by the 5700 & 5600 calls, on the other hand 6000 call lost the maximum open interest, followed by the 5900 call. On the Put option side, the 5500 put added the maximum open interest, followed by the 5400 & 5200 puts, while the 5600 put lost the maximum open interest followed by the 5700 & 5800 puts. The entire activity in the cash as well as F&O markets indicates profit booking in Index futures along with addition of short positions in the Call as well as Put options side.

On the technical side, Nifty has breached the crucial support of 5571 on low volumes, but the across the sector selling makes it more critical. All the technical indicators on the daily and weekly charts have also turned negative, making the overall trend negative and if the global headwinds and macroeconomic factors do not spring a positive surprise, the markets may see some major downside in the days to come. The levels to watch out for Nifty will be 5629 & 5654 on the upside and 5538, 5505 & 5447 on the downside. On the currency front, the Rupee fell to its two month low, extending its losing streak to a third week, as investors remained cautious on risk assets ahead of a key Eurogroup meeting and worries over the U.S. fiscal cliff. The partially convertible Rupee finally closed at 55.16 while the near month USD-INR future settled at 55.32 for the week.

On the international markets front, the Asian markets closed on a mixed note, while the European markets closed deep in the red, and the U.S markets rallied on the last trading day of the week after the house speaker said budget talks with Obama were constructive. On the Energy futures front, both the Brent and WTI crude oil futures closed up by 0.87 & 1.22% at 108.95 & 86.92 $/bbl and the Natural Gas future closed up by 2.35% at 3.79 $/bbl.