RESTLESS

The markets opened on an absolutely flat note but touched their intraday highs within initial one hour of trade but could not sustain their momentum and after trading almost flat for the first half of the trading session, the markets entered the negative zone and from that point onwards there was no looking back and the markets ultimately closed near their lowest point of the day. The Nifty and the Sensex closed down by 34 and 120 points respectively. The market breadth also turned extremely negative with 424 advances to 1103 declines. On the sectoral front, the FMCG sector was the biggest loser, followed by the Banking, Midcap, IT, & Energy sectors. On the individual stocks front, Asian Paint, ACC, NTPC, Kotak Bank and Sun Pharma were the top five Nifty gainers, while GAIL, Hind Unilever, HCL Tech, Hindalco & Cairn were the top five Nifty losers for the day. On the institutional side, FIIs were net buyers to the tune of 1046 crores and the DIIs were net sellers to the tune of 855 crores in the cash market.

On the derivatives side, there was very little activity, with FIIs turning net sellers in Index futures and Options to the tune of mere 33 and 128 crores respectively and the story was same on the Stock futures and Options side where they turned net sellers to the tune of 102 & 101 crores respectively. Nifty future settled at 6061, with just 13 points premium to the spot along with a considerable loss of open interest. On the Options side PCR stood at 1.03 along with a increase in the India VIX by 1.68%. On the Call options side, the 6200 call added the maximum open interest, followed by the 6100 and 6000 calls while there was uniform loss of open interest from the 5000 to 5900 calls. On the Put options side, except the 5700 put there was uniform loss of open interest from the 5000 to 6200 puts. The entire activity in the cash market was again stock specific while the overall sentiment was grim and in the F&O space the sudden fall gave the participants opportunity for some call writing at higher levels, while on the Index futures side more positions were liquidated indicating the weakening of the trend.

On the technical side, after trading in a very tight range for four consecutive sessions Nifty finally gave away some of the gains, indicating that a top formation might have occurred, but its too early to say whether there will be any trend change but the F&O data coupled with the weak sentiment in the cash markets indicate that a trend change might be in the offing. Going by the sentiment and international market trends we may see more lackluster sessions like these, before actual correction sets in. The levels to watch out for Nifty will be 6086 & 6124 on the upside and 6016 and 5990 on the downside. On the currency front, the Rupee ended lower today after gains from the government’s move to raise the import tax on gold were erased by dollar demand from state run banks and weak equities. The partially convertible Rupee finally closed at 53.81 while the USD-INR future settled at 53.75 for the day.

On the international markets front, the Asian markets have closed on a mixed note, while the European markets have closed in the red and the U.S. stocks have also fallen on the lower than expected corporate results and more than expected fall in the existing home sales data. On the energy futures front, both the Brent and WTI crude oil futures are trading up by 0.32 & 0.60% at 112.03 & 96.62 $/bbl respectively, while the Natural gas future is trading down by 0.86% at 3.53 $/MMBtu.