BREATHER

The markets opened on a fairly positive note, and traded with a strong positive bias, barring a few instances, when the markets momentarily slipped into the red, the overall market breadth was positive and ultimately both the indices closed very near to their highest point of the day. The Nifty and the Sensex closed up by 63 & 188 points respectively. The market breadth was however evenly balanced with 682 advances to 656 declines. On the sectoral front, the Banking sector was the biggest gainer, followed by the IT, Midcap & Infra sectors, while the FMCG sector was the biggest loser for the day. On the individual stocks front, Reliance Infra, HDFC, HCL Tech, JP Associates & Kotak Bank were the top five Nifty gainers, while Jindal Steel, Sun Pharma, Hind Unilever, Dr. Reddy & ITC were the top five Nifty losers for the day. On the institutional side, both  FIIs & DIIs were net buyers to the tune of 40 & 197 crores respectively in the cash market.

On the derivatives side, FIIs were net sellers in both Index futures and Options to the tune of 218 & 280 crores respectively, while they were net buyers in Stock futures to the tune of 608 crores and net sellers in Stock options to the tune of 15 crores. Nifty future settled at 5564, with just 5 points premium to the spot, along with a considerable increase in open interest. On the Options side, PCR stood at 0.90, along with a marginal decrease in India VIX by 1.96%. On the Call options side, the 5300 call added the maximum open interest, while there was uniform loss of open interest 5500 to 6000 calls. On the Put options side, the 5400 put added the maximum open interest, followed by the 5300, 5500 & 5200 puts, while there was uniform loss of open interest from the 5600 to 6000 puts. The entire activity in the F&O space indicates further shorting in Index futures, while there was profit booking on the Call options side and some more long positions were added on the Put options side.

On the technical side, Nifty finally managed to pullback from the from the seven month lows, but the markets are still not out of the woods, which was clearly indicated by the market breadth and lack of participation by the FIIs. Nifty has to clearly make a pullback beyond the 5750 mark in order to make a meaningful recovery, but as of now the first hurdle seems to be the 5610 mark which must be conquered and sustained, in order to convince the market participants to come forward and participate. The levels to watch out for Nifty, will be 5593, 5627 on the upside and 5501, 5485 on the downside. On the currency front the Rupee rose today as domestic shares recovered from a five-day slump, though concerns about recent heavy foreign outflows and dollar demand from oil importers kept gains in check. The partially convertible Rupee finally closed at 54.52, while the near month USD-INR future settled at 54.65 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 extremely positive note and the U.S. markets have risen as China’s imports grew, Japan reiterated it stimulus plans and investors speculated earnings will beat estimates. On the Energy futures front, the Brent crude oil future is trading down by 0.50% at 105.64 $/bbl, while the WTI crude oil futures is trading almost flat at 94.21 $/bbl and the Natural gas future is trading up by 2.70% at 4.12 $/MMBtu.