UPTICK

The markets opened on a subdued note, just ahead of the monetary policy and as a knee jerk reaction to the disappointment from the monetary policy, the markets touched their intraday lows, but made an almost V shaped recovery and covered all their losses, till the start of the second half of the trading session and from that point onwards, the markets gained strength with every passing hour to close near their day’s high till the end of the day’s session The Nifty and the Sensex closed up by 42 and 148 points respectively. The market breadth was however marginally positive with 711 advances to 624 declines. On the sectoral front, the FMCG sector was the biggest gainer, followed by the Auto, Energy, IT and Banking sectors. On the individual stocks front, M&M, BHEL, Bajaj Auto, Bharti Airtel and Sun Pharma were the top five Nifty gainers, while Ranbaxy, Hindalco, Dr. Reddy, Sesa Goa & NMDC were the top five Nifty losers for the day. On the institutional side, FIIs were net sellers to the tune of 165 crores, while DIIs were net buyers to the tune of 624 crores in the cash market.

On the derivatives side, FIIs were net sellers in both Index futures and options to the tune of 321 and 212 crores respectively, while they were net buyers in both Stock futures and options to the tune of 477 and 8 crores respectively. Nifty future settled at 5848, with 2 points discount to the spot, along with a considerable increase in open interest. On the options side, PCR stood at 0.92, along with a marginal fall in the India VIX by 0.93%. On the Call options side, the 6100 call added the maximum open interest, followed by the 6000 & 5900 calls, while there was uniform loss of open interest from the 5000 to 5700 calls. On the Put options side, the 5800 put added the maximum open interest, followed by the 5700 & 5900 puts, while the 5600 put lost the maximum open interest, followed by the 5400 & 6000 calls. The entire activity in the F&O space indicates, fresh longs in the Index futures, along with some short covering on the Call options side and put writing on the higher side of the market.

On the technical side, Nifty rose for the second consecutive session on the back of stronger international markets and touched the immediate overhead resistance of 5850 on increasing volumes. The technical indicators on the daily charts, indicate that this pullback may lead the markets  further to new higher levels. The levels to watch out for Nifty will be 5880, 5910 on the upside and 5795, 5767 on the downside. On the currency front the Rupee fell today, as the RBI kept interest rate changes on hold and on caution  ahead of the Federal Reserve’s meeting later this week. The partially convertible Rupee finally closed at 57.87, while the near month USD-INR future settled at 57.97 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 are also trading on a strong note on the back of more than expected rise in the NAHB housing market index and as investors weigh prospects for less economic stimulus before this week’s Fed Policy meet. On the Energy futures front, the Brent crude oil future is trading marginally down by 0.15% at 105.78 $/bbl, while the WTI crude oil future us trading marginally up by 0.13% at 98.20 $/bbl, while the Natural Gas future is trading up by 3.50% at 3.86 $/MMBtu.

Stocks to Watch,

LT-  BUY 1440-1450, TGT – 1467,1479, SL – 1413

AXIS BANK – BUY 1300, TGT – 1335,1356. SL – 1270

SBIN -  BUY 2030-2040, TGT – 2092,2123. SL - 2013