BREAKDOWN

The markets opened on a negative note inspite of positive cues from its Asian peers, and finally touched their intraday lows within an hour of initial trade and continued to trade rangebound for the entire trading session and  finally closed down near their lowest level of the day. The Nifty and the Sensex closed down by 35 and 103 points respectively. The market breadth was also grim with 270 advances to 1264 declines. On the sectoral front, the Midcap sector was the biggest loser followed by the Auto, Energy, Banking and Metal sectors while the FMCG sector was the sole and biggest gainer for the day. On the individual stocks front, Hind Unilever, ITC, LT, TCS & Kotak Bank were the top five Nifty gainers while Tata Motors, JP Associate, GAIL, Cipla & Ranbaxy were the top five Nifty losers for the day. On the institutional side, FIIs were net buyers to the tune of 1026 crores and DIIs were net sellers to the tune of 752 crores in the cash market.

On the derivatives side Nifty future settled at 6020 with just 1 point premium to the spot along with a massive loss of open interest. On the Options side PCR stood at 1.04, along with an increase in the India VIX by 5.78%. On the Options side, the 6100 call added the maximum open interest, followed by the 6000, 5900 & 6200 calls, while on the Put options side except the 5800 put which added the maximum open interest, there was uniform loss of open interest from the 5000 to 6200 puts. The activity in the Cash markets indicates across the sector selling along with stock specific activity, while on the F&O side there was further liquidation of positions in Index futures along with massive call writing at higher levels, indicating the weak market sentiment and suggesting that the uptrend may finally be coming to an end.

On the technical side, Nifty came very close to breaching the 6000 level and finally showed signs of a breakdown which will become evident if this mild correction continues for at least two more sessions. The levels to watch out for Nifty will be 6053 & 6080 on the upside and 5999 & 5965 on the downside. On the currency front, the Rupee was weighed down by strong dollar demands from oil firms, but RBI’s notification of increase in foreign institutional investment limits in debt prompted dollar selling by exporters. The partially convertible Rupee finally closed at 53.68 while the near month USD-INR future settled at 53.69 for the day.

On the international markets front, the Asian and the European markets have closed on a very strong note, and the U.S. stocks markets have risen after an unexpected drop in jobless claims and better than forecast earnings offset a slump in Apple Inc. On the Energy futures front, both the Brent and WTI crude oil futures are trading up by 0.44 & 1.09% at 113.30 & 96.27 $/bbl respectively even after a more than expected rise in U.S. weekly crude oil inventories while the Natural gas future is trading down by 2.15% at 3.47 $/MMBtu even after a more than expected fall in U,S. weekly Natural gas inventories.