INDECISION

The markets opened on a mildly positive note, tracking their Asian peers and after the initial one hour of trade the markets fell almost vertically and touched their intraday lows within the next half an hour,  and from this point onwards the markets traded sideways for the next two hours, but recovered almost all their losses to close almost flat, till the end of the session. The Nifty and the Sensex closed down by 13 & 22 points respectively. The market breadth was extremely negative with 600 advances to 897 declines. On the sectoral front, there was hardly any activity, with most of the sectors closing either marginally in the positive or negative. On the individual stocks front, Hindalco, Jindal Steel, Hind Unilever, Tata Steel & TCS were the top five Nifty gainers, while Ambuja Cement, Sun Pharma,  BPCL, JP Associate and M&M were the top five Nifty losers for the day. On the institutional side, FIIs were net buyers to the tune of 467 crores and the DIIs were net sellers to the tune of 444 crores.

On the derivatives side, there was hardly any activity, with the FIIs turning net buyers in Index futures and Options to the tune of mere 56 &154 crores respectively, while they were net sellers in Stock futures and Options to the tune of 114 & 22 crores respectively. Nifty future settled at 5931 with just 15 points premium to the spot, along with a considerable loss of open interest. On the Options side, PCR stood at 0.99 along with a fall in the India VIX by 1.04%. On the Call Options side, the 6000 call added the maximum open interest, followed by the 5900 call, while there was uniform loss of open interest, from the 5000 to 5800 calls. On the Put Options side, the 6000 put added the maximum open interest, followed by the 5400 put, while there was uniform loss of open interest from the 5000 to 5900 puts. The entire activity in the Cash as well as the Futures markets indicates complete indecision in the markets.

On the technical side, Nifty managed to hold on to the 5900 level despite the uncertainty, but the massive loss of open interest on the Index futures side, indicates liquidation of long positions and gradual shift of interest to the new F&O series. Most of the focus will now shift to the new series and Nifty may consolidate in a tight range till expiry unless there are any major global headwinds. The level to watch out for Nifty will be 5941 & 5967 on the upside, and 5897 & 5845 on the downside. On the currency front, the Rupee fell once again today, as heavy dollar buying by oil refiners and gold importers continued to hurt the domestic currency amid another bout of risk aversion globally. The partially convertible Rupee finally closed at 54.84, while the near month USD-INR future settled at 54.92 for the day.

On the international markets front the Asian markets except Nikkei have closed on a flat note, while there was hardly any movement in the European markets and the U.S. market are trading with very little change , on the back of good Home sales and manufacturing data as investors remain focused on the budget negotiations. On the Energy futures front, the Brent and WTI crude oil futures are trading with marginal losses at 110.17 & 89.97 $/bbl respectively, while Natural Gas future is trading up by 3.39% at 3.43 $/MMBtu, on the back of data showing more than expected fall in the U.S. Natural Gas storage levels.