SURPRISE

The markets opened on a negative note and traded with a negative bias till the second half of the trading session, and with just two hours left for the end of the day’s session the markets made an almost vertical ascent and ultimately both the indices closed very near to their highest point of the day.  The Nifty and the Sensex closed up by 45 and 161 points respectively. The market breadth also ended on a positive note with 810 advances to 669 declines. On the sectoral front, the FMCG sector was the biggest gainer followed by the IT, Banking and Midcap sectors. On the individual stocks front, Hero Motocorp, DLF, Asian Paint, JP Associate & Larsen Toubro were the top five Nifty gainers while Jindal Steel, Hind Unilever, Coal India, Tata Motors and Ultratech Cement were the top five Nifty losers for the day. On the institutional side, FIIs were net buyers to the tune of 630 crores while DIIs were net sellers to the tune of 715crores in the cash market.

On the derivatives side, FIIs were net buyers in both Index futures and Options to the tune of 409 and 315 crores respectively, and they were also net buyers in Stock futures and options to the tune of 204 and 74 crores respectively. Nifty future settled at 5889 with 26 points premium to the spot, along with a marginal increase in open interest. On the Options side PCR stood at 0.97 along with a 2.26% fall in the India VIX. On the Call options side, the 5900 call lost the maximum open interest, followed by the 5700 & 5800 calls, while the 6100 call added the maximum open interest, followed by the 6000 call. On the Put Options side, the 5800 put added the maximum open interest, followed by the 5900 & 5600 puts. The entire activity in the cash market was sector specific while in the F&O space there was mostly short covering which lead to the swift rise in the markets towards the end of the day’s session.

On the technical side, Nifty managed to close above yet another crucial level of 5850 on increasing volumes, but incidentally this sharp upmove has once again happened on the back of major short covering and as suggested yesterday the positive momentum in the international markets may sustain this upmove and may lead to further short covering. The levels to watch out for Nifty will be 5893, 5924 on the upside and 5823, 5770 on the downside. On the currency front, the Rupee strengthened for a second day, hitting a near one week high, as dollar selling by foreign banks and late recovery in the domestic share market boosted sentiment. The partially convertible Rupee finally closed at 54.56, while the near month USD-INR future settled at 54.80 for the day.

On the international markets front, the Asian markets have closed on a mixed note, while the European markets have closed on a positive note and the U.S. markets have risen on the back of an unexpected fall in the jobless claims, showing further improvement in the labor market. On the Energy futures front, the Brent Crude oil future is trading marginally down by 0.19% at 110.84 $/bbl, while the WTI crude oil future is trading up by 0.81 % at 91.16 $/bbl and the Natural Gas future is trading up by 3.44% at 3.59 $/MMBtu after data showed more than expected fall in weekly Natural Gas inventories.