CARNAGE

The markets opened with a gap down closely tracking their Asian peers and overnight weakness in the U.S. markets. It was across the sector selling, right from the beginning and things became worse as the session progressed and ultimately both the indices closed at their lowest point of the day. The Nifty and the Sensex closed down by 91 and 317 points respectively. The market breadth was also extremely negative with 316 advances to 1202 declines. On the sectoral front the Banking sector was the biggest loser followed by the FMCG, Energy, Metals and Auto sectors. On the individual stocks front,  Cipla, Gail & Bajaj Auto were the only Nifty stocks which managed to close in the positive, while Jindal Steel, Tata Steel, JP Associate, ICICI Bank & Sesa Goa were the top five Nifty losers for the day. On the institutional side, surprisingly the FIIs were net buyers to the tune of 1214 crores while the DIIs were net sellers to the tune of 229 crores in the cash market.

On the derivatives side, FIIs were net sellers in Index futures to the tune of 486 crores and net buyers in Index options to the tune of 138 crores and they were net buyers in both Stock futures and Options to the tune of 83 and 148 crores respectively. Nifty future settled at 5853, with just 1 point premium to the spot, along with a marginal increase in open interest. On the Options side PCR stood at 0.98, along with a massive rise in the India VIX by 8.59%. On the Call options side, the 6000 call added the maximum open interest, followed by the 5900, 5800 & 6100 calls, while the 6200 call lost the maximum open interest. On the Put options side, the 5600 put added the maximum open interest, followed by the 5800 & 5500 puts, while the 5900 put lost the maximum open interest, followed by the 6000 & 6100 puts. The entire activity in the cash markets saw uniform across the sector selling, while in the F&O space massive call writing took place accompanied by addition of longs on the put options side which increased the ferocity of the fall.

On the technical side, after two consecutive sessions of successful moves above the 5900 mark, surprisingly Nifty gave away all its gains amidst a global sell off in equities and other asset classes but managed to close at another crucial support of 5850. The data in the F&O side along with the carnage in the international markets suggest a further sell off may happen from this level and the levels to watch out for Nifty will be 5903, 5914 on the upside and 5823, 5795, 5746 on the downside. On the currency front, the Rupee fell its most in two and a half months as global risk aversion pushed local stocks sharply lower, with the currency awaiting cues from the federal budget next week. The partially convertible Rupee finally closed at 54.47, while the near month USD-INR future settled at 54.55 for the day.

On the international markets front, the Asian and the European markets have closed deep in the red, and the U.S. stocks are also going the same way after Federal Reserve minutes showed that policy makers backed more flexibility in stimulus as investors weighed corporate earnings. On the energy futures front, both the Brent and WTI crude oil futures are trading down by 1.5 & 2.34% at 113.81 and 93 $/bbl and the Natural gas future is also trading down by 1.05% at 3.24 $/MMBtu.