CAUTION

The markets opened on a very flat note and continued to trade with a negative bias till the second half of the trading session and with just one and a half hours left for the end of the day’s session the markets fell almost vertically and ultimately both the indices closed near their lowest point of the day. The Nifty and the Sensex closed down by 36 & 126 points respectively. The market breadth was extremely negative with 444 advances to 1097 declines. On the sectoral front, the FMCG sector was the biggest loser, followed by the Pharma, Banking and IT sectors. On the individual stocks front, Tata Motors, Bharti Airtel, Jindal Steel, Bajaj Auto & Power Grid were the top five Nifty gainers, while Sesa Goa, ITC, Hindalco, IDFC, & Rel Infra were the top five Nifty losers for the day. On the institutional side, surprisingly the FIIs were net buyers to the tune of 1256 crores and DIIs were net sellers to the tune of 666 crores in the cash market.

On the derivatives side, FIIs were net sellers in Index futures and Options to the tune of 350 & 206 crores respectively and they were also net sellers in the Stock futures and Options to the tune of 637 and 14 crores respectively. Nifty future finally settled at 5876, with 25 points premium to the spot, along with a marginal increase in open interest. On the Options side, PCR stood at 0.91, along with an increase in India VIX by 1.38%. On the Call options side, the 5900 call added the maximum open interest, followed by the 6000 & 5800 calls, while there was uniform loss of open interest from the 5000 to 5700 calls. On the Put options side, the 5700 put added the maximum open interest, followed by the 5800 & 5900 puts. The activity in the cash market was completely sector specific, while the fall in the markets for the third consecutive session has led to some call writing at higher levels along with a corresponding addition of long positions on the Put options side.

On the technical side, Nifty has convincingly broken the 5900 level and has traded below it for three consecutive sessions and to make matters worse, there seems to be no breakthrough happening on the domestic policy front and the global headwinds are also taking their toll, but inspite of all these factors, the FII flows are continuing. It may too early to suggest a trend change, but strict stop losses should be maintained in case the scenario worsens from this point onwards. The levels to watch out for Nifty, will be 5891& 5932 on the upside and 5825, 5809 & 5770 on the downside. On the currency front, the Rupee fell today, dragged by a late slide in the domestic stock market and a fall in Euro. The partially convertible rupee finally closed at 54.46, while the near month USD-INR future settled at 54.64 for the day.On the international markets front, the Asian markets have closed on a mixed note, while the European markets have closed in the red and the U.S. stock markets are also trading with losses, after a better than estimated jobless claim report was offset by remarks from the U.S. house speaker, that “White house is not serious about cutting spending”. On the Energy futures front, both the Brent and WTI crude oil futures are trading down by 0.87 & 0.36% at 107.07 & 86.47 $/bbl respectively and the Natural gas future is trading down by 1.88% at 3.31 $/MMBtu.