CAUTIOUS

The markets started the February series on a very cautious note and after trading rangebound for the initial two hours of trade, the markets finally broke and from that point onwards there was no looking back and the market breadth deteriorated with every passing hour and finally the markets closed very near to their lowest point of the day. The Nifty and the Sensex closed down by 36 and 114 points respectively. The market breadth was also negative with 634 advances to 859 declines. On the sectoral front, the Banking sector was the biggest loser followed by the Auto and IT sectors. On the individual stocks front, BPCL, Cipla, Maruti, Dr. Reddy & Bajaj Auto were the top five Nifty gainers, while Tata Motors, JP Associate, DLF, Ultratech Cement & Bharti Airtel were the top five Nifty losers for the day. On the institutional side, FIIs were net buyers to the tune of 763 crores while DIIs were net sellers to the tune of 1088 crores in the cash market.

On the derivatives side, FIIs were net sellers in Index futures to the tune of 100 crores and net buyers in Index options to the tune of 1331 crores, while they were net sellers in both Stock futures and Options to the tune of 258 and 39 crores respectively. Nifty future settled at 6036 with 37 points premium to the spot along with a marginal increase in open interest. On the options side PCR stood at 1.05, along with a fall in the India VIX by 2.62%. On the Call options side, the 6100 call added the maximum open interest, followed by the 6000 & 6200 calls, while the 5900 call lost the maximum open interest followed by the 5800 call. On the Put options side, the 5700 put added the maximum open interest followed by the 6000, 5600 & 5900 puts. The entire activity in the cash markets was once again stock specific, while in the F&O space the Index future continued to add on to the long positions, while in the options space market participants continued to add positions according to the change in the market situation.

On the technical side, once again Nifty broke the 6000 mark, after four sessions of lackluster movement, but the fall was not convincing enough to start a big downslide, and further market moves will depend on the news from the corporate as well as the international markets. The levels to watch out for Nifty will be 6011, 6040 on the upside and 5970, 5941 & 5906 on the downside. On the currency front, the Rupee closed marginally stronger on Friday and strengthened for a fourth straight week with dollar inflows into the domestic share and debt markets boosting the local currency. The partially convertible Rupee finally closed at 53.19 while the near month USD-INR future settled at 53.42 for the day.

On the international markets front, the Asian markets closed on a mixed note while the European and U.S. markets closed on a very strong note. On the Energy futures front both the Brent and WTI crude oil futures closed up by 1.05 & 0.29% at 116.76 & 97.77 $/bbl while Natural Gas future closed down by 1.14% at 3.30 $/MMBtu.