TREND CHANGE

Once again the markets opened on a flat note, and traded rangebound for the initial two hours of trade, but post that point the market breadth started worsening and the markets fell almost vertically and could not recover their losses till the end of the session. The Nifty and the Sensex closed down by 51 and 124 points respectively. The market breadth also closed on an extremely negative note with 271 advances to 1241 declines. On the sectoral front, once again the Banking sector was the biggest loser followed by the Midcap, Energy & Media sectors. On the individual stocks front,  Hind unilever, Asian Paint, Cipla, Tata Motors & Lupin were the top five Nifty gainers, while Rel Infra, Bharti Airtel, JP Associate, IDFC & DLF were the top five Nifty losers for the day. On the institutional side, both FIIs & DIIs were net sellers to the tune of 237 and 357 crores respectively in the cash market.

On the derivatives side, FIIs were net sellers in both Index futures and Options to the tune of 362 & 1613 crores respectively, while they were net sellers in Stock futures to the tune of just 34 crores and net buyers in stock options to the tune of mere 12 crores. Nifty future settled at 5715, with just 21 points premium to the spot, along with a considerable loss of open interest. On the Options side, PCR stood at 0.97, along with a marginal decrease in India VIX by 0.30%. On the Call options side, the 5700 call added the maximum open interest followed by the 5800 & 5600 calls, while on the Put options side the 5800 put lost the maximum open interest, followed by the 5900 & 5700 puts, while the 5600 put added the maximum open interest, followed by the 5400 put. The entire activity in the F&O space indicates profit booking in Index futures along with massive call writing and liquidation of longs on the Put options side.

On the technical side, once again Nifty has breached the crucial support of 5700, and the market data suggests that there is no let up in the selling pressure and it is only a matter of time before the 5600 level is tested. The levels to watch out for Nifty will be 5732, 5770 on the upside and 5669, 5651 on the downside. On the currency front, the Rupee recovered today mainly after worries over political instability eased and dollar sales by custodian banks and state run companies. The partially convertible Rupee finally closed at 54.36, while the near month USD-INR future settled at 54.44 for the day.

On the international markets front, the Asian markets have closed on a strong note, while the European markets have closed on a mixed note and the U.S. markets have risen as Euro area leaders weigh options  for Cyprus and investors await Federal Reserve’s monetary policy decision. On the Energy futures front, both the Brent and WTI crude oil futures are trading up by 0.79 & 0.66% at 108.30 & 93.13 $/bbl on the back of unexpected fall in weekly U.S. crude oil inventories, while the Natural Gas future is trading down by 0.43% at 3.9 $/MMBtu.