JITTERY

The benchmark indices opened on a negative note, tracking their global peers and traded with a strong negative bias throughout the day and ultimately both the indices closed near their lowest point of the day. The decline was mainly led by the rate sensitives, followed by media reports that the RBI chief raised concerns about the high inflation, denting hopes of any rate cuts this month. The Nifty and the Sensex closed down by 55 & 169 points respectively. The market breadth was extremely negative with 329 advances to 1198 declines. On the sectoral front, the Banking sector was the biggest loser followed by the Midcap and Auto sectors. On the individual stocks front, Reliance Industries, HCL Tech, Dr. Reddy, Power Grid & TCS were the top five Nifty gainers, while Hindalco, JP Associates, Tata Motors, Reliance Infra & Maruti were the top five Nifty losers for the day. On the institutional side, FIIs were net buyers to the tune of 1029 crores and DIIs were net sellers to the tune of 692 crores in the cash market.

On the derivatives side, FIIs were net sellers in Index futures to the tune of 343 crores and net buyers in Index options to the tune of 1462 crores, while they were net buyers in Stock futures to the tune of 196 crores and net sellers in Stock options to the tune of 105 crores. Nifty future settled at 6019, with just 17 points premium to the spot, along with a massive fall in open interest. On the Options side PCR stood at 0.97, along with a rise in the India VIX by 3.02%. On the Call options side, the 6100 call added the maximum open interest followed by the 6000 & 6200 calls, while there was uniform loss of open interest from the 5000 to 5800 calls. On the Put options side, the 6000 put lost the maximum open interest, followed by the 5900, 6100 & 6200 puts, while the 5700 put lost the maximum open interest, followed by the 5800 put. The entire activity in the Cash markets was once again stock specific while in the F&O space, profit booking continued in the Index futures space along with Call writing at higher levels and marginal increase of long positions on the lower side of the trading range in the Put options.

On the technical side, as expected the signs of fall were evident yesterday and that is what exactly happened today and Nifty somehow managed to close above the 6000 mark, but the continuous profit booking on the futures side along with shrinking premium on Nifty futures points to lower levels going forward, but the downside appears to be limited since there are no meaning full shorts in the system to trigger a full blown correction. The levels to watch out for Nifty will be 6020 & 6048 on the upside and 5974 & 5957 on the downside. On the currency front, the Rupee weakened for a second straight session today as sustained dollar demand for oil firms and weak regional sentiment prompted investors to cover short dollar positions. The partially convertible Rupee finally closed at 54.69, while the near month USD-INR future settled at 54.84 for the day.

On the international market side, the Asian markets particularly Nikkei ended deep in the red, while the European markets have also closed on a mixed note and the U.S stock markets are also trading with losses as World Bank downgraded global growth forecasts and concerns about Europe’s economy grew after weak economic data from Europe. On the Energy futures front, both the Brent and WTI crude oil futures are trading up by 0.36 & 0.96% at 110.03 & 94.62 $/bbl respectively after a fall in the U.S. weekly crude oil inventories, while the Natural gas future is trading down by 2.05% at 3.38 $/MMBtu.