OPTIMISM

The markets opened on a very modest note, but just fifteen minutes into the first half of the trading session, the markets made a almost vertical jump and from that point onwards there was no looking back, propelling the markets the most in nearly seven months, led by the rate sensitives like autos and banks on the back of optimism that the RBI will cut rates next month on a continued slump in global commodity prices. The Nifty and the Sensex closed up by 120 & 387 points respectively. The market breadth was also positive with 844 advances to 520 declines. On the sectoral front, the Banking sector was the biggest gainer, followed by the FMCG, Energy, Midcap & Auto sectors. On the individual stocks front, Axis Bank, IDFC, Maruti, ONGC and M&M were the top five Nifty gainers, while Infosys, Cairn, HCL Tech & Sesa Goa were the top five Nifty losers for the day. On the institutional side, FIIs were net buyers to the tune of 592 crores and DIIs were net sellers to the tune of 205 crores in the cash market.

On the derivatives side, FIIs were net buyers in both Index futures and Options to the tune of 1265 & 392 crores respectively, while they were net buyers in Stock futures to the tune of 370 crores and net sellers in Stock options to the tune of 79 crores. Nifty future settled at 5696, with just 7 points premium to the spot, along with a considerable decrease in open interest. On the Options side PCR stood at 1.09, along with a decrease in the India VIX by 2.17%. On the Call options side, the 5500 Call lost the maximum open interest, followed by the 5600 & 5700 calls, while the 5900 call added the maximum open interest, followed by the 6000 call. On the Put options side, the 5600 put added the maximum open interest, followed by the 5700 put, while the 5200 put lost the maximum open interest, followed by the 5300 put. The entire activity in the F&O space indicates, profit booking in the Index futures as well as the Call and put options side.

On the technical side, Nifty made a sharp pullback from the lows and crossed the key resistance levels finally closing comfortably above the key support levels and this sudden pullback seems to have changed the immediate downtrend for sometime and may lead to some further pullback, but all of it depends on the newsflow in the days to come. If the corporate results are better than expected, this pullback may find more support in the day’s to come. The levels to watch out for Nifty will be 5739, 5760 on the upside and 5615, 5595 on the downside. On the currency front, the Rupee rose to its highest level in three weeks as a broad selloff in global commodities raised hopes that the pressure on the country’s current account deficit will ease and give the central bank more room to cut rates. The partially convertible Rupee, finally closed at 54.15, while the near month USD-INR future settled at 54.25 for the day.

On the international markets front, the Asian and the European markets have closed in the red, while the U.S. markets have risen on the back of better than estimated housing starts and corporate data. On the Energy futures front, both the Brent and WTI crude oil futures are trading down by 0.98 & 0.30% at 99.64 and 88.76 $/bbl respectively, while the Natural gas future is trading down by 0.40% at  4.19 $/MMBtu.