SILVER LINING

The markets opened with a big gap up on the back of better than estimated CAD numbers and policy reforms announced by the government. In fact such a huge opening rally took everyone by surprise and the momentum built at the start of the session continued to strengthen with every passing hour and ultimately the markets managed to close near their highest point of the day, till the end of the session. The Nifty and the Sensex closed up by 160 and 520 points respectively. The market breadth was also positive with 1011 advances to 377 declines. On the sectoral front, the Banking sector was the biggest gainer, followed by the Energy, Midcap, Pharma & Auto sectors. On the individual stocks front, Jindal Steel, BHEL, BPCL, Reliance Infra and Tata Power were the top five Nifty gainers while Ranbaxy, HCL Tech, Hind Unilever and Ultratech Cement were the top four Nifty losers for the day. On the institutional side, FIIs were net buyers to the tune of 1124 crores, while DIIs were net sellers to the tune of 581 crores in the cash market.

On the derivatives side, FIIs were net buyers in both Index futures and options to the tune of 1692 & 1169 crores respectively, while they were also net buyers in both Stock futures and options to the tune of 688 and 12 crores respectively. Nifty future settled at 5841, with 1 point discount to the spot, along with a considerable increase in open interest. On the options side, PCR stood at 1.06, along with a fall in the India VIX by 4.77%. On the Call options side, the 6000 call added the maximum open interest, followed by the 5900 & 6100 calls, while the 5600 call shed the maximum open interest, followed by the 5700 & 5500 calls. On the Put Options side, the 5800 put added the maximum open interest, followed by the 5700, 5300, 5500 & 5900 puts. The entire activity in the F&O space saw addition of long positions in the Index future along with addition of longs on the call options side and put writing happening at the higher levels of the market.

On the technical side, although it can be termed as an extremely sharp pullback from the extremely oversold levels, but the decent buy figures from the FIIs side add credence to the sharp rise and raises hopes of a further pullback from these levels, but much of it will depend on the international news flow and further policy measures announced by the government on the domestic front. The levels to watch out for Nifty, will be 5712, 5739, 5771 on the upside and 5641, 5601 on the downside. On the currency front the Rupee posted its biggest daily gain in nine months on Friday, fuelled by the robust rally in local stocks and the government’s move to raise gas prices for the first time in three years also aiding sentiment. The partially convertible Rupee, finally closed at 59.38, while the near month USD-INR future settled at 59.74 for the day. 

On the International markets front, the Asian markets closed on a positive note, while the European markets closed in the red and the U.S. markets also fell after the biggest three day rally since January as investors weighed economic data and stimulus comments from Federal Reserve officials. On the Energy futures front, both the Brent and WTI crude oil futures closed down by 0.64 & 0.50% at 102.16 & 96.56 $/bbl respectively, and the Natural gas future also closed down by 0.47% at 3.57 $/bbl.