DOWNTREND

The markets opened on a positive note on the first day of the new F&O series, and continued to trade in the positive for the entire first half of the trading session, but just at the start of the second half of the trading session the market breadth started turning negative and both the indices touched their intraday lows within the next two hours. The markets could not recover much from that point and ultimately both the indices closed very near to their lowest point of the day. The Nifty and the Sensex closed down by 21 & 56 points respectively. The market breadth was extremely negative with 400 advances to 901 declines. On the sectoral front, once again the banking sector was the biggest loser, followed by the Midcap and metal sectors. On the individual stocks front, Ambuja Cement, ITC, Hero Motocorp, Sun Pharma and M&M were the top five Nifty gainers, while Hindalco, Sesa Goa, PNB, Coal India and Hind Unilever were the top five Nifty losers for the day. On the institutional side, FIIs were net buyers to the tune of 278 crores and DIIs were net sellers to the tune of 489 crores in the cash market.

On the derivatives side, FIIs were net sellers in Index futures to the tune of 194 crores and net buyers in Index options to the tune of 1736 crores, while they were net buyers in both Stock futures and options to the tune of 20 and 53 crores respectively. Nifty future settled at 5925, with a hefty premium of 39 points to the spot along with a marginal increase in open interest. On the Options side, PCR stood at 1.18, along with a marginal increase in the India VIX. On the Call Options side, the 6000 call added the maximum open interest, followed by the 6100 & 5900 calls. On the Put options side, the 5800 put added the maximum open interest, followed by the 5400, 5700 & 5500 puts. The entire activity in the F&O space indicates continued shorting in the Index futures and Call options, along with long positions on the Put options side.

On the technical side, once again Nifty has broken the major supports and the indicators on the daily and weekly charts indicate an extremely negative trend, which is likely to continue in the wake of adverse newsflow on the domestic front. The levels to watch out for Nifty, will be 5930, 5974 on the upside and 5855, 5824 & 5780 on the downside. On the currency front, the Rupee hit a five week high on Friday, as the central bank’s measure to drain liquidity shore up the currency, but it gave up most gains as sustained dollar demand from oil importers to meet month end import requirements weighed. The partially convertible Rupee finally closed at 59.04, while the near month USD-INR future settled at 59.07, for the day.

On the international markets front, both the Asian and the European markets closed on a mixed note while the U.S. markets have closed on a positive note. On the energy futures front, both the Brent and WTI crude oil futures closed down by 0.45 & 0.75% at 107.17 & 104.7 $/bbl respectively, while the Natural Gas future closed down by 2.44% at 3.56 $/MMBtu.