CHAOS

The markets continued with their losing streak and after Thursday’s carnage and Friday’s muted close, once gain the markets opened with a gap down tracking their Asian peers and traded with a strong negative bias throughout the trading session and ultimately both the benchmark indices closed very near to their lowest point of the day. The Nifty and the Sensex closed down by 77 and 233 points respectively. The market breadth was also extremely negative with, 246 advances to 1128 declines. On the sectoral front the FMCG sector was the biggest loser followed by the Midcap, Banking & Energy & IT sectors. On the individual stocks front, Jindal Steel, Lupin, Tata Power, HDFC & ICICI Bank were the top five Nifty gainers, while JP Associate, Ranbaxy, DLF, Kotak Bank & Ambuja cement were the top five Nifty losers for the day. On the institutional side, once again the FIIs were net sellers to the tune of 1553 crores, while DIIs were net buyers to the tune of 931 crores in the cash market.

On the derivatives side FIIs were net sellers in Index futures, to the tune of 33 crores, while they were net buyers in Index options to the tune of 1231 crores. On the other hand they were net buyers in both Stock futures and options to the tune of 452 and 48 crores respectively. Nifty future settled at 5588 with 2 points discount to the spot, along with a considerable loss of open interest. On the options side PCR stood at 0.94, along with a massive jump in the India VIX by 10.40%. On the Call options side, the 5700 call added the maximum open interest, followed by the 5600 & 5500 calls, while there was uniform loss of open interest from the 5000 to 6100 calls. On the Put options side, the 5400 put added the maximum open interest, followed by the 5500 , 5200, 5300 & 5100 puts, while there was uniform loss of open interest from the 5000 to 6100 puts. The entire activity in the F&O space indicates, rollover activity picking up in Index futures along with call writing at higher levels, along with corresponding long positions on the Put options side.

On the technical side, Nifty is trading well below all its major support levels on the daily charts, and the next  major support may be 5476, but below this level, there seems to be no support till 5100 and with the relentless FII selling in the domestic markets, coupled with strong headwinds, do not augur well for the markets and its only a matter of time, before these supports are taken out. The levels to watch out for Nifty, will be 5631, 5672 on the upside and 5557, 5524 , 5483 on the downside. On the currency front, the Rupee fell to near record lows as foreign investors continue to sell debt and stocks as part of exit from emerging markets. The partially convertible finally closed, at 59.68, while the near month USD-INR future settled at 59.79 for the day.

On the international markets front the Asian and the European markets have closed deep in the red, and the U.S. stocks have also retreated, sending the S&P 500 to nine week lows, as Chinese equities entered a bear market amid concern a cash crunch will hurt the world’s second largest economy. On the Energy futures front, both the Brent and WTI crude oil future are trading up by 0.31% and 1.58% at 101.16 & 95.16 $/bbl respectively, while the Natural Gas future is trading down by 0.63% at 3.76 $/MMBtu.