DECEPTION

The markets opened on a weak note, tracking their Asian peers, and traded rangebound for the initial two hours of trade, but as the news of better than expected inflation figures hit the markets, coupled with low crude and gold prices led to hopes that the Reserve Bank of India will likely cut rates in it May review, the markets started recovering and gained strength with every passing hour and ultimately both the indices bucked the international trend and closed on positive note. The Nifty and the Sensex closed up by 40 & 115 points respectively. The market breadth was however marginally positive with 720 advances to 611 declines. On the sectoral front, the FMCG sector was the biggest gainer, followed by the Energy and the Banking sector. On the individual stocks front, BPCL, Bank of Baroda, ONGC, Ultratech Cement & State Bank of India were the top five Nifty gainers, while Sesa Goa, Dr. Reddy, TCS, Tata Motors & DLF were the top five Nifty losers for the day. On the institutional side FIIs were net sellers to the tune of 418 crores, while the DIIs were net buyers to the tune of 297 crores in the cash market.

On the derivatives side, FIIs were net sellers in Index futures and Options to the tune of 110 and 67 crores respectively, while they were net buyers in Stock futures to the tune of 343 crores and net sellers in stock options to the tune of 58 crores. Nifty future settled at 5568, along with a considerable increase in open interest. On the Options side, PCR stood at 0.91, along with a marginal increase in the India VIX by 0.97%. On the Call options side, the 5600 call lost the maximum open interest, followed by the 6000 & 5800 calls, while 5500 call added the maximum open interest, followed by the 5700 call. On the Put Options side, the 5500 put added the maximum open interest, followed by the 5400 & 5600 puts. The entire activity in the F&O space indicates fresh longs in Index futures along with profit booking on the Call options side and option writing on the Put options side.

On the technical side, although Nifty staged a smart pullback, but the underlying market breadth is still very cautious and every rise in the markets, will be used as a selling opportunity. The levels to watch out for Nifty, will be 5606, 5645 on the upside and 5514, 5461 on the downside. On the Currency front, the Rupee fell to a one –week low today, as tumbling commodity prices hit global risk currencies, but pared losses after lower than expected inflation data raised hopes of a rate cut next month. The partially convertible Rupee finally closed at 54.62 while the near month USD-INR future settled at 54.70 for the day.

On the international markets front, the Asian and the European markets have closed deep in the red, and the U.S. markets are also trading with losses after China’s economy grew at a slower pace than economists forecast. On the Energy futures front, both the Brent and WTI crude oil futures are trading down by 2.08 &  2.69% at 100.89 & 89.15 $/bbl respectively, while the Natural gas future is trading down by 1.49% at 4.15 $/MMBtu.