UNEASY

The markets opened on a very quite note, and what was expected to be a lackluster session turned out to be a extremely volatile session, after trading almost flat for the first one hour of the trading session the markets started falling almost vertically and touched their intraday lows within the next three hours of the trading session and could not recover till the end of the session and ultimately both the indices closed near their lowest point of the day. The Nifty and the Sensex closed down by 53 and 163 points respectively. The market breadth also ended on an extremely negative note with 486 advances to 1011 declines. On the sectoral front, the Banking sector was the biggest loser, followed by the Energy, IT, Metal & FMCG sectors. On the Individual stocks front, Cairn, Power Grid, Bajaj Auto, Ultratech Cement, & Maruti were the top five Nifty stocks which managed to close in the positive, while State Bank of India, Tata Steel, ONGC, IDFC & Sesa Goa were the top five Nifty losers for the day. On the institutional side, both FIIs and DIIs were net sellers to the tune of 204 and 154 crores respectively in the cash market.

On the derivatives side FIIs were net sellers in Index futures to the tune of 284 crores and net buyers in index options to the tune of 423 crores, while they were net sellers in both Stock futures and options, to the tune of 372 & 29 crores respectively. Nifty future settled at 5721, with 35 points premium to the spot along with a marginal increase in open interest. On the options side PCR increased to 1.05, along with a rise in the India VIX by 1.05%. On the Call options side, the 5800 call added the maximum open interest, followed by the 5700 & 5600 calls. On the Put options side, the 5500 put added the maximum open interest, followed by the 5600 put, while the 5700 put lost the maximum open interest, followed by the 5800 & 5900 puts. The entire activity in the cash as well as the F&O markets indicates profit booking along with call writing at higher levels to hedge positions and profit booking on the higher side in the put options side.

On the technical side, Nifty broke the 5700 mark on falling volumes, but found support at the crucial level of 5684. Although it was a nasty fall, but not convincing enough for a change of trend. I still believe that as long as Nifty holds above the 5659 & 5621 levels, the uptrend may still be intact. The levels to watch out for Nifty, will be 5733 & 5760 on the upside and 5658, 5630 and 5592 on the downside. On the currency front, the Rupee fell for a second session on Friday, as the Euro gave up its early gains and local stocks fell after the country’s biggest lender reported earnings below expectations. The partially convertible Rupee finally closed at 54.75 for the week, while the near month USD-INR future settled at 54.82 for the week.

On the international markets front, the Asian markets closed on a very negative note, while the European and the U.S. markets on flat note. On the Energy futures front, both the Brent and WTI crude oil future closed on a very positive note, up by 2.0 & 1.15% at 109.40 & 86.07 $/bbl respectively, while the Natural gas future closed down by 2.91% at 3.50 $/MMBtu.