DOWNTREND ?

The markets opened on an absolutely flat note and somehow managed to trade in the positive zone for the entire first half of the trading session, but post that point the markets traded very rangeboud for the next two hours, and with just one and a half hours left for the end of the day’s session, the markets finally broke down and touched their lowest point of the day and finally closed at their lowest point of the day, till the end of the session. The market breadth was extremely negative with 361 advances to 1159 declines. On then sectoral front, the IT sector was the sole and the biggest gainer for the day, while the FMCG sector was the biggest loser followed by the Banking, Midcap, Energy and Auto sectors. On the individual stocks front, Infosys, Wipro, TCS. Sesa Goa & HCL Tech were the top five Nifty gainers while JP Associate, Jindal Steel, Kotak Bank, Hind Unilever & ONGC were the top five Nifty losers for the day. On the Institutional side, FIIs were net buyers to the tune of 825 crores and DIIs were net sellers to the tune of 516 crores in the cash market.

On the derivatives side, FIIs were net buyers in Index futures and Options to the tune of 180 and 495 crores respectively and they were net buyers in Stock futures and net sellers in Stock options to the tune of 299 and 214 crores respectively. Nifty future settled at 5977 with just 26 points premium to the spot, along with a considerable loss of open interest. On the Options side PCR stood at 1.01, along with a marginal decrease in open interest by 0.30%. On the Call options side, the 6000 call added the maximum open interest followed by the 5900 & 5800 calls. On the Put options side, the 5700 put added the maximum open interest, followed by the 5900 put, while the 6000 put lost the maximum open interest, followed by the 5600 put. The entire activity in the cash market indicates long positions were created in undervalued sectors, while there was profit booking in the sectors with overstretched valuations. On the F&O side, profit booking continued in Index futures along with call writing at higher levels and long positions in the Put options on the lower side of the markets trading range.

On the technical side, although Nifty closed at a critical support of 5950, three consecutive sessions of declines has changed the short term trend and the levels to watch out for Nifty, will be 5999 & 6028 on the upside and 5933, 5900 & 5878 on the downside. On the currency front, the Rupee fell on Friday as output contracted and exports fell for the eighth straight month highlighting the currency’s vulnerability to the weak economy despite sustained capital inflows. The partially convertible rupee finally closed at 54.75, while the near month USD-INR future closed at 54.91 for the day.

On the international markets front, except Nikkei the Asian markets closed in the red, while the European and the U.S.markets closed on a almost flat note. On the energy futures front, both the Brent and WTI crude oil futures closed down by 1.12 & 0.28% at 110.64 & 93.56 $/bbl respectively, while the Natural gas future closed up by 4.80% at 3.33 $/MMBtu.