BREATHER

The markets opened on a very quite note, after yesterday’s phenomenal rise, but retained their positive momentum within the first one hour of trade, but traded rangebound for the entire session and ultimately both the indices closed on a positive note, with modest gains. The Nifty and the Sensex closed up by 23 and 34 points respectively. The markets continued their rally today amidst expectations of early rate cuts by RBI. The market breadth was however marginally negative with 674 advances to 709 declines. On the sectoral front, once again the Banking sector was the biggest gainer, followed by the Energy, Pharma and Midcap sectors, while the FMCG sector was the biggest loser for the day. On the individual stocks front, JP associate, IDFC, Lupin, Cipla & Reliance were the top five Nifty gainers, while NMDC, Tata Motors, ITC, Jindal Steel & TCS were the top five Nifty losers for the day. On the institutional side, FIIs were net buyers to the tune of 1070 crores and the DIIs were net sellers to the tune of 390 crores in the cash market.

On the derivatives side, FIIs were net buyers in Index futures to the tune of mere 62 crores, and net sellers in Index options to the tune of 509 crores, while they were net sellers in Stock futures to the tune of 195 crores and net buyers in Stock options to the tune of mere 0.53 crores. Nifty future settled at 6178, with 11 points premium to the spot, along with a marginal increase in open interest. On the Options side, PCR stood at 1.05, along with a fall in the India VIX by 2.15%. On the Call options side, there was uniform loss of open interest from the 5000 to 6100 calls, while the 6200 call added the maximum open interest. On the Put options side, the 5800 put lost the maximum open interest, followed by the 5600 & 5900 puts, while the 6200 put added the maximum open interest, followed by the 6000 & 6100 puts. The entire activity in the F&O space indicates profit booking on the Call options space and put writing on the Put options side along with a marginal increase in long positions in the Index futures.

On the technical side, Nifty touched its two and a half year high, amidst strong global inflows and there seems to be no stopping even after yesterday’s meteoric rise. The technical indicators on the daily as well as weekly charts are also supportive of a strong upmove. The levels to watch out for Nifty, will be 6194, 6220 on the upside and 6111, 6032 on the downside. On the currency front, the Rupee close almost flat, as gains in domestic share market were offset by the euro’s fall versus the dollar. The partially convertible Rupee finally closed at 54.77, while the near month USD-INR future settled at 54.89 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 negative note and the U.S. markets are fluctuating between gains and losses as housing starts and manufacturing in the Philadelphia area slumped and jobless claims arose. On the Energy futures front, both the Brent and WTI crude oil future are trading up by 0.3 & 0.72% at 103.88 and 95 $/bbl respectively, and the Natural gas future is trading down by 3.70 % at 3.920 $/MMBtu after a more than expected rise in weekly U.S. natural gas inventories.