CAUTION

The markets opened on a subdued note after the last week’s meteoric rise, and continued to trade with a negative bias, but as the session progressed the markets started recovering their losses and ultimately managed to cover all their losses till the end of the first half of the trading session and from that point onwards, the markets made a smart recovery and ultimately managed to close near their day’s high, till the end of the session. The Nifty and the Sensex closed up by 22 & 76 points respectively. The market breadth also managed to close on a positive note, with 790 advances to 537 declines. On the sectoral front, the FMCG sector was the biggest gainer, followed by the Banking sector, while the rest of the sectors closed on a marginally positive note. On the individual stocks front, PNB, JP Associates, Cairn, Hindalco & Bank of Baroda were the top five Nifty gainers, while NTPC, Coal India, Infosys, Tata Steel & Tata Motors, were the top five Nifty losers for the day. On the institutional side, FIIs were net sellers to the tune of 227 crores, while DIIs were net buyers to the tune of 454 crores in the cash market.

On the derivatives side, FIIs were net sellers in both Index futures and options to the tune of 214 and 245 crores respectively, while they were net buyers in Stock options to the tune of 237 crores and net sellers in Stock options the tune of mere 31 crores. Nifty future settled at 6033, with just 2 points premium to the spot, along with a marginal increase in open interest. On the Option side, PCR stood at 1.37, along with a marginal increase in the India VIX by 0.54%. On the Call options side, except the 6200 call there was uniform loss of open interest from the 5000 to 6100 calls, while on the Put options side, the 6000 put added the maximum open interest, followed by the 5900 & 6100 puts, on the other hand the 5600 put lost the maximum open interest, followed by the 5700 & 5400 puts. The entire activity in the F&O space indicates more short covering on the Call options side, along with Put writing at higher levels of the market.

On the technical side, Nifty continued with its uptrend on increasing volumes, mainly on the back of sustained buying by the DIIs and continued short covering in the Future’s market. As suggested yesterday, Nifty is trading above all its major support levels and the uptrend seems to be intact, but the sudden increase in the Bank rate by RBI to stem the currency volatility may spoil the mood and lead to a sell off tomorrow. The levels to watch out for Nifty will be 6054, 6072 on the upside and 5994, 5958 on the downside. On the currency front, the Rupee fell today, as recent economic data worsened concerns about an economy reeling under a record current account deficit. The partially convertible finally closed at 59.89, while the near month USD-INR future settled at 60.03 for the day.

On the international markets front, Asian markets have closed on a mildly positive note, while the European markets have closed on a relatively stronger note and the U.S. markets are fluctuating between gains and losses as better than estimated manufacturing data and earnings, offset a disappointing retail sales report. On the Energy futures front, both the Brent and WTI crude oil futures are trading marginally up at 108.02 & 105.73 $/bbl respectively, while the Natural Gas future is trading down by 1.55% at 3.587 $/MMBtu.