LACKLUSTRE

The benchmark indices opened on a flat note and traded rangebound throughout the entire trading session and finally closed with modest gains. The sentiment was weak even after the RBI lowered its key policy rate yesterday, but struck a cautious note on further easing, citing concerns about the high current account deficit , fiscal deficit and inflationary risks. The Nifty and the Sensex closed up by 6 & 14 points respectively. The market breadth was also negative with 574 advances to 922 declines. On the sectoral front, the Energy sector gained the most followed by the Banking sector while there was hardly any activity in the other sectors which closed with minor losses or gains. On the individual stocks front, DLF, Cipla, Hind Unilever, Sesa Goa & Reliance were the top five Nifty gainers while GAIL, PNB, Tata Power, Larsen toubro & Jindal Steel were the top five Nifty losers for the day. On the institutional side, FIIs were net buyers to the tune of 906 crores and DIIs were net sellers to the tune of 1096 crores in the cash market.

On the derivatives side, FIIs were net buyers in both Index futures and Options to the tune of 334 and 957 crores respectively, while they were net sellers in Stock futures to the tune of 162 crores and net buyers in Stock options to the tune of 208 crores. Nifty future settled at 6060 with 6 points discount to the spot along with considerable loss of open interest. On the Options side PCR stood at 0.96, along with a marginal decrease in the India VIX by 0.62%. On the Call as well as Put options side, there was uniform shedding of opening interest, from the 5000 to 6200 calls and puts indicating the rollover activity was in full swing. The entire activity in the Cash market was once again stock specific, while in the F&O space, it was completely dominated by rollover activity.

On the technical side, Nifty managed to close above the 6050 mark, amid another lacklustre trading session marked by extremely negative market breadth and persistent selling by domestic participants. Tomorrow being the future’s expiry day, the levels to watch out for Nifty will be 6070 & 6089 on the upside and 6042, 6020 & 5988 on the downside. On the currency front, the Rupee strengthened to its highest level in three and half months, helped by dollar inflows for upcoming share sales and positive sentiment on the back of a strong euro. The partially convertible rupee finally closed at 53.30 while the near month USD-INR future closed at 53.52 for the day.

On the international markets front the Asian markets have closed on a very strong note, while the European markets have closed in the red and the U.S. stocks have fallen after data showed that the economy unexpectedly shrank last quarter and investors await Federal Reserve’s policy announcement.  On the Energy futures front, both the Brent and WTI crude oil futures are trading almost flat at 114.61 and 97.58 $/bbl respectively after an unexpected rise in weekly U.S. crude oil inventories, while the Natural Gas future is trading up by 2.03% at 3.32 $/MMBtu after a more than expected fall in weekly U.S. Natural gas inventories.