UPSURGE

Once again the markets opened with a gap up after another dose of good news from the U.S. senate and maintained their momentum throughout the session and closed very near to their day’s high. The market breadth was positive with 958 advances to 568 declines. The Nifty and the Sensex closed up by 45 and 133 points respectively. On the sectoral front the Banking sector was the biggest gainer, followed by the Energy and Auto sectors. On the individual stocks front, Bajaj Auto, IDFC, JP Associate, BPCL & Maruti were the top five Nifty gainers, while Asian Paint, Wipro, Power Grid, ITC & Coal India were the top five Nifty losers for the day. On the institutional side, FIIs were net buyers to the tune of 1108 crores and DIIs were net sellers to the tune of 417 crores in the cash market.

On the derivatives side, FIIs were net buyers in Index futures and Options to the tune of 374 & 2547 crores respectively, while they were net sellers in Stock futures and Options to the tune of 159 & 26 crores respectively. Nifty future settled at 6035, with just 42 points premium to the spot, along with a marginal increase in open interest. On the Options side PCR stood at 0.96, with marginal increase in India VIX by 0.15%. On the Call options side, the 6200 call added the maximum open interest, while the 6000 call lost the maximum open interest, followed by the 5900 call. On the Put options side, the 6100 put added the maximum open interest, followed by the 5800 & 5900 puts, while the 5500 put lost the maximum open interest, followed by the 5600 put. The entire activity in the Cash market was sector specific and as usual FIIs played a major role in the upsurge. On the F&O side, there were addition of longs on the upper side of the market, while there was profit booking at the lower levels, and on the Put options side, there were addition of longs on the lower side, in order to hedge the sudden rise in the markets.

On the technical side, Nifty breached the 6000 level briefly and managed to close comfortably above the resistance zone for the second consecutive session. If Nifty sustains at this level for one more session, there is a real possibility that a breakout has happened. The levels to watch out for Nifty will be 6005, 6017 & 6029 on the upside and 5981, 5952 & 5903 on the downside. On the currency front, the Rupee made a strong rally against the dollar as optimism over the U.S. “fiscal cliff” deal boosted risk assets globally, but demand for dollars from oil firms pulled the Rupee off the day’s high. The partially convertible Rupee finally closed at 54.35, while the near month USD-INR future settled at 54.52 for the day.

On the international markets front, the Asian and the European markets started the year with a  bang and the U.S. markets are also trading with impressive gains as lawmakers passed a bill averting spending cuts and tax increases threatening a recovery in the world’s biggest economy. On the energy futures front, both the Brent and WTI crude oil futures are trading at their month highs at 112.17 & 92.87 $/bbl respectively, while the Natural Gas futures are trading  down by 4.42% at 3.20 $/MMBtu.