RELIEF

The markets opened with a gap up tracking its Asian peers, and on the back of strong short covering in the current F&O series. The markets continued their positive momentum throughout the trading session and ultimately closed near their highest point of the day. The Nifty and the Sensex closed up by 94 & 324 points respectively. The market breadth also recovered sharply and ultimately closed on a marginal positive note with 720 advances to 628 declines. On the sectoral front the IT sector was the biggest gainer, followed by the Energy, Banking & Pharma sectors. On the individual stocks front, Ultratech Cement, Cairn, DLF, ONGC & HDFC Bank were the top five Nifty gainers, while IDFC, Maruti, Grasim. PNB & Tata Motors were the top five Nifty losers for the day. On the institutional side, FIIs were net sellers to the tune of 1043 crores and DIIs were net buyers to the tune of 358 crores in the cash market.

On the derivatives side, FIIs were net buyers in both Index futures and options to the tune of 47 and 1279 crores respectively and they were also net buyers in the Stock futures and options to the tune of 1064 & 39 crores respectively. Nifty July future settled at 5687, with just 5 points premium to the spot, along with a massive increase in open interest. On the Options side PCR stood at 1.11, along with a massive fall in the India VIX by 10.54%. On the July Call options side, the 6000 call added the maximum open interest, followed by 5700, 5800 & 5900 calls, while on the Put options side the 5600 put added the maximum open interest, followed by the 5100, 5200 & 5700 puts. The entire activity in the F&O space indicates some long positions on the Call options side, along with some put writing at higher levels which shows some confidence among the participants to take long positions after a sustained fall.

On the technical side it was more of a technical bounce back from the oversold levels, and since it was not backed by institutional buying, it may find difficult to sustain these levels and much of the movement will depend strongly on news flow from the domestic as well as international front. The levels to watch out for Nifty will be 5710, 5739 on the upside and 5641, 5601& 5572 on the lower side. On the currency front, the Rupee recovered from the record lows today, helped by corporate inflows, with a lower than expected current gap also helping relieve some of the concerns about the battered currency. The partially convertible finally closed at 60.19, while the near month USD-INR future settled at 60.57 for the day.

On the international markets front, the Asian and the European markets have closed on an extremely positive note, and the U.S. markets have also risen on the better than estimated economic data and assurances on stimulus efforts from Federal Reserve officials. On the Energy futures front, both the Brent and WTI crude oil futures are trading up by 1.26 & 1.64% at 102.92 and 97.05 $/bbl respectively, while the Natural Gas future is trading down by 3.97% at 3.58 $/MMBtu after data showed a more than expected rise in weekly U.S. Natural gas inventories.