TREND REVERSAL ?

The markets opened on a positive note and traded rangebound for the entire first half of the trading session, but just at the start of the second half of the trading session, the markets started gaining but the pace of rise took everyone by surprise and ultimately both the indices closed near their highest point of the day.  The Nifty and the Sensex closed up by 82 and 269 points respectively. The market breadth also closed on a positive note, with 980 advances to 529 declines. On the sectoral front, the FMCG sector was the biggest gainer followed by the Banking, Energy & Midcap sectors. On the individual stock front, Jindal Steel, IDFC, HDFC, BPCL & Kotak Bank were the top five Nifty gainers, while Ambuja Cement, Maruti, Infosys, Wipro & Tata Motors were the top five Nifty losers for the day. On the institutional side, FIIs were net buyers to the tune of 1283 crores and DIIs were net sellers to the tune of 836 crores in the cash markets.

On the derivatives side, the FIIs were net buyers in Index futures and options to the tune of 569 and 162 crores respectively, while they were net buyers in Stock futures to the tune of 495 crores and net sellers in stock options to the tune of 168 crores. Nifty future settled at 5968, with 22 points premium to the spot, along with a marginal decrease in open interest. On the Options side, PCR stood at 1.10, along with a 2.07% increase in India VIX. On the Call options side, the 5800 call lost the maximum open interest, followed by the 6000 & 5700 calls, while the 6200 call added the maximum open interest.  On the Put option side, the 5900 put added the maximum open interest, followed by the 6000 & 5800 puts. The entire activity in cash market saw sector specific buying, while in the F&O major short covering happened on the call options side, along with massive put writing.

On the technical side, Nifty managed to close convincingly above the 5900 mark mainly on the back of strong FII inflows and strong international markets, ultimately leading to a short term trend reversal, which may lead to some more upmove from these levels. The levels to watch out for Nifty will be 5971, 5987 on the upside and 5901, 5877 on the downside. On the currency front, the Rupee rose for the third consecutive session to its highest level in more than a week, helped by dollar sales by custodian banks and gains in Euro. The partially convertible Rupee finally closed at 54.28, while the near month USD-INR future settled at 54.54 for the week.

On the international markets front the upward momentum created over the last three sessions continued and the Asian, European and U.S. markets have all closed on a very strong note for the week. On the Energy futures front, the Brent and WTI crude oil futures closed almost flat at 110.85 & 91.95 $/bbl for the week, while the Natural Gas future closed up by 1.31% at 3.63 $/MMBtu.