OPTIMISM

The markets opened with a gap up, for the second consecutive day on the better than expected corporate results and accomodative stance taken by the federal reserve. The markets maintained their extremely positive momentum throughout the day, but with just one hour left for the end of the day’s session the markets made an almost vertical ascent and ultimately both the indices closed at their highest point of the week. The Nifty and the Sensex closed up by 74 & 282 points respectively. The market breadth was however negative with 596 advances to 710 declines. On the sectoral front, the IT sector was the biggest gainer of the day, followed by the Pharma, Energy and Banking sectors, while the FMCG sector was the biggest loser of the day. On the individual stocks front, Infosys, IDFC, LT, TCS & Tata Motors were the top five Nifty gainers, while Maruti, JP Associate, ONGC, Ultratech Cement & IndusInd Bank were the top five Nifty losers for the day. On the institutional side, FIIs were net buyers to the tune of 645 crores, while DIIs were net sellers to the tune of 145 crores in the cash market.

On the derivatives side, FIIs were net buyers in both Index futures and Options to the tune of 71 & 73 crores respectively and they were also net buyers in Stock futures and Options to the tune 543 & 227 crores respectively. Nifty future settled at 6007, with 2 points discount to the spot along with a considerable increase in open interest. On the Options side PCR stood at 1.32, along with a marginal decrease in India VIX by 1.06%. On the Call options side, the 6000 call lost the maximum open interest, followed by the 5800, 5900 & 5500 calls, while the 6100 call added the maximum open interest. On the Put Options side, the 5900 put added the maximum open interest, followed by the 6000, 5700 & 5800 puts, while the 5400 put lost the maximum open interest, followed by the 5500 put. The entire activity in the F&O space indicates massive short covering on the call options side, along with put writing at higher levels, due to the sudden surge in the markets.

On the technical side, Nifty is trading above all its major support levels on the daily and weekly charts, and Friday’s surge with increase in volumes, indicates that the positive momentum will continue for some more time on the back of positive news flow from the domestic as well as international markets. The levels to watch out for Nifty will be, 6035, 6061 on the upside and 5967, 5925 on the downside. On the currency front, the Rupee rebounded in late trade on Friday, boosted by dollar selling by state run banks, likely on behalf of the Reserve Bank of India, which helped the Rupee snap a nine week losing streak.

On the International markets front, the Asian and the European markets closed on a muted note, while the U.S. markets have closed on a relatively positive note. On the Energy futures front, both the Brent and WTI crude oil futures  closed up by 1.0 & 0.99% at 108.81 & 105.95 $/bbl respectively and the Natural Gas future closed up by 0.86% at 3.64 $/MMBtu.