PERPLEXING

The markets opened on a negative note, and touched their intraday lows within 1 and half hours of the first half of the trading session and traded in the negative zone for the next one hour, but recovered all their losses till the start of the second half of the trading session and the market breadth improved as the session progressed and with just one hour left for the end of the day’s session, the markets touched their intraday highs and ultimately closed near their day’s high, till the end of the session. The market breadth was positive with 948 advances to 540 declines. On the sectoral front, the Auto sector was the biggest gainer, followed by the Banking & Pharma sectors, while FMCG sector was the sole and the biggest loser for the day. On the individual stocks front, Tata Motors, Bharti Airtel, Cipla, Wipro & Rel Infra were the top five Nifty gainers, while Hind Unilever, ONGC, ITC, GAIL & HDFC Bank were the top five Nifty losers for the day. On the institutional side, FIIs were net buyers to the tune of 335 crores and the DIIs were net sellers to the tune of 154 crores in the cash market.

On the derivatives side, Nifty future settled at 5676, with 31 points premium to the spot, along with a considerable loss of open interest. On the Options side, PCR stood at 0.98, along with a fall in the India VIX by 2.22%. On the Call options side, the 5900 call added the maximum open interest, followed by the 5800 call, while the 6000 call lost the maximum open interest, followed by the 5300 & 5500 calls. On the Put options side, the 5300 put added the maximum open interest, followed by the 5600, 5200 & 5700 puts. The entire activity in the cash as well as the F&O markets indicates stock and sector specific buying for the second consecutive session, along with call writing at lower levels and put writing at higher levels, indicating a shift in the market sentiments on the back of positive news and fund inflows in the markets.

On the technical side, spot Nifty closed below the 5700 mark for the fifth consecutive session on low volumes, but today’s positive close along with a fall in the volatility levels, aided the market participants to add some long positions, but much of these long positions will depend on the news flow from the international market over the next one week. The levels to watch out for Nifty will be 5662, 5680 & 5710 on the upside and 5614, 5584 & 5566 on the downside. On the currency front, the Rupee rose for the third successive session, driven by foreign fund inflows and the currency is likely to witness ranged trading in the absence of any domestic cues. The partially convertible Rupee, finally closed at 53.69, while the near month USD-INR future finally settled at 53.96 for the day.

On the international markets front, the Asian markets have closed on a mixed note, while the European markets have closed on a strongly positive note, and the U.S. markets are also trading on a fairly positive note, after data showed that manufacturing in the U.S., expanded at a faster than projected pace as orders and production picked up, showing the industry is stabilizing. On the energy futures front, the Brent crude oil future is trading down by 0.48% at 108.17 $/bbl, while the WTI crude oil future is trading up by 0.94% at 87.05 $/bbl and the Natural Gas future is trading down by 0.38% 3.67 $/MMBtu.