INDECISION

The markets opened on a very flat note on Monday but could not build up on the gains and ultimately both the indices closed on a flat note, but the underlying market breadth was extremely negative, but Tuesday was altogether different day, when the markets opened on a positive note but could not hold on to their gains and closed at their lowest point of the day.  The Nifty and the Sensex closed down by 17 & 51 points respectively; however the market breadth was positive with 1011 advances to 430 declines. On the sectoral front, the Banking sector was the biggest loser followed by the IT sector while the rest of the sectors closed on a marginally positive note. On the individual stock front, Bharti Airtel, Siemens, Maruti, Cipla & Tata power were the top five Nifty stocks which managed to stay in the green, while JP Associate, Ultratech Cement, DLF, Dr. Reddy & Grasim were the top five Nifty losers for the day. On the institutional side there was hardly any participation where the FIIs were net sellers to the tune of 18 crores and DIIs were net buyers to the tune of 19 crores.

On the derivatives side FIIs were net buyers in Index futures and options to the tune of 61 and 446 crores respectively, while they were net buyers in Stock futures to the tune of 19 crores and net sellers in stock options to the tune of 31 crores. Nifty future settled at 5681 with just 14 points premium to the spot along with a marginal loss of open interest. On the Options side, PCR stood at 0.93 along with a marginal rise in the India VIX by 0.34%. On the Call options side, the 5800 call added the maximum open interest followed by the 5700 & 5600 calls while the 6000 call lost the maximum open interest followed by the 5900 call. On the Put options side, the 5500 & 5400 puts added the maximum open interest, while the 5800 put lost the maximum open interest.  The entire activity in the cash as well as F&O markets indicates profit booking along with some call writing at higher levels to cash in on the sudden fall in the markets.

On the technical side Nifty tested another support of 5661 on very low volumes, and most of the technical indicators are in sell mode , and with the strong global headwinds, Nifty may continue to trade like this for few more sessions. The levels watch out for Nifty will be 5690, 5713 on the upside and 5652, 5637 & 5613 on the downside. On the currency front, the Rupee fell to its lowest level in two months on Monday after data showing a record trade deficit and contraction in factory output stoked fears about economic growth at a time of continued high inflation. The partially convertible rupee finally closed at 54.88 while the near month USD-INR future settled at 55.11 for the day.

On the international markets front, today the Asian markets have closed on a positive note, while the European markets have closed deep in the red and the and the U.S. markets are also trading with losses. On the Energy futures front, both the Brent and WTI crude oil futures are trading up by 1.08 & 0.98 % at 108.49 & 86.69 $/bbl respectively, and the Natural Gas future is also trading up by 1.47% at 3.79 $/MMBtu.