WAIT AND WATCH

The markets took an unexpected turn and opened with a gap up after ten consecutive sessions of fall, and gradually the market breadth strengthened with every passing hour and ultimately both the indices managed to close near their highest point of the day. The market breadth was also positive with 937 advances to 432 declines. The Nifty and the Sensex closed up by 109 and 351 points respectively. On the sectoral front the Banking sector was the biggest gainer, followed by the Energy, FMCG, Auto and Midcap sectors. On the individual stocks front, Hindalco, Tata Motors, Reliance Infra, Maruti & JP Associates were the top five Nifty gainers, while IndusInd Bank, HeroMotocorp, Hind Unilever & Cipla were the top four Nifty losers for the day. On the institutional side FIIs were net sellers to the tune of 306 crores and DIIs were net buyers to the tune of 911 crores in the cash market.

On the derivatives side, FIIs were net buyers in both Index futures and Options, to the tune of 547 and 1152 crores respectively, while they were net buyers in Stock futures and net sellers in Stock options to the tune 353 and 81 crores respectively. Nifty future settled at 5806, with 2 points discount to the spot, along with a marginal decrease in open interest. On the Options side, PCR stood at 0.9, along with an increase in India VIX by 5.61%. On the call options side, except the 6000 call, there was uniform loss of open interest, from the 5100 t 6100 calls. On the Put options side, the 5800 put added the maximum open interest, followed by the 5700 & 5600 puts, while the 5400 put lost the maximum open interest, followed by the 5900 and 6100 puts. The entire activity in the F&O space indicates that the massive rally was mainly due to short covering in the Index futures and options, due to the sudden change in the international market conditions.

On the technical side, it was more of a technical bounceback, as Nifty took support at its major support of 5708 and further upmove will mainly depend on the conditions created by the major policy announcements from tomorrow onwards. The levels to watch out for Nifty, will be 5838, 5857, 5880 on the upside and 5758, 5708 on the downside. On the currency front, the Rupee gained on Friday, on the back of dollar selling by exporters in spot and forward markets. The partially convertible Rupee finally closed at 57.51, while the near month USD-INR future settled at 57.64 for the day.

On the international markets front, the Asian and the European markets closed on a very positive note, while the U.S. markets, ended on a weak note. On the Energy futures note, the WTI and Brent crude oil futures closed up by 0.93 & 1.20% at 97.85 & 105.93 $/bbl respectively, while the Natural Gas future closed down by 2.12% at 3.73 $/MMBtu.