SILVER LINING

The markets opened on a very quite note, inspite of positive cues from the Asian markets, and started drifting downwards after the initial half an hour of the trade and traded with a strong negative bias throughout the day and ultimately both the indices closed almost flat. The Nifty closed down by 3 points while the Sensex closed up by 30 points. The market breadth was extremely negative with 450 advances to 1051 declines. On the sectoral front the FMCG sector was the biggest and sole gainer for the day, while there was hardly any activity in the rest of the sectors, which closed marginally in the negative. On the institutional side there was no participation from the FIIs side, where they were net sellers to the tune of just 2 crores, while the DIIs were net sellers to the tune of 503 crores in the cash market.

On the derivatives side, the story was the same where the FIIs were net sellers in both Index futures and options, to the tune of mere 55 & 37 crores respectively, while they were net buyers in Stock futures to the tune of just 84 crores and net sellers in Stock options to the tune of 10 crores. Nifty future settled at 5589 with just 18 points premium to the spot along with a marginal decrease in open interest. On the Options side PCR stood at 1.01, along with an increase in the India VIX by 2.84%. On the Call options side the 5600 call added the maximum open interest, followed by the 5700 & 5400 calls, on the other hand the 5900 call lost the maximum open interest, followed by the 6000 & 5800 calls. On the Put options side, the 5600 put lost the maximum open interest, followed by the 5800 & 5700 puts, while the 5400 put added the maximum open interest, followed by the 5300 put. The entire activity in the cash market showed active participation by the DIIs, where they continued with their profit booking  spree, while in the F&O markets some positive signs emerged today, where there was profit booking in the Index futures side, along with addition of some long positions on the call options side and put writing at lower levels of the markets, indicating a short term technical bounceback is possible.

On the technical side, although Nifty breached the crucial level of 5569 on a intraday basis, but somehow managed to close above it on very low volumes. Although it was a lacklustre session, the underlying breadth was extremely negative and markets are still not out of the woods, but as mentioned yesterday any positive event may change the overall sentiment in a day and the Index may reverse all the losses. The levels to watch out for Nifty, will be 5593, 5615 & 5648 on the upside and 5549, 5531 & 5506 on the downside. On the currency front, the Rupee rebounded today on the back of dollar sales from the custodian banks but dollar demand from oil firms capped the gains. The partially convertible Rupee closed at 55.06 while the near month USD-INR future settled at 55.11 for the day.

On the International markets front, the Asian and European markets have closed on a strongly positive note and the U.S. markets are also trading on a strong note amid better than forecast housing data and confidence expressed by the U.S. president on a budget agreement with the Congress. On the energy futures front, both the Brent and WTI crude oil futures are trading up 2.40 & 2.83% at 111.58 and 89.39 $/bbl respectively while the Natural Gas future is trading down by 0.78% at 3.76 $/MMBtu.