ECSTATIC

What a day ? its was. Just opposite to everybody's expectations, the markets shot over the roof, bringing some relief to the battered investor's, just like the monsoon's are about to bring to the, whole of India, from the scorching heat. The markets opened on a positive note and gradually gained momentum, as the session progressed, but the momentum gathered more pace at the start of the second half of the trading session and the markets touched their intraday high in the last half an hour of the trading session, before cooling off a bit to close near the day's high. The Nifty and the Sensex closed up by 134 and 434 points respectively. The market breadth was extremely positive, with 1168 advances to 319 declines. On the sectoral front, it was the day of the interest rate sensitives, with the Banking sector leading the way, followed by the Auto, Energy and the Midcap sector. On the individual stock front, there were a string of star performers for the day, with Tata Motors leading the way, followed by HeroMotocorp, Jindal Steel, Rel Infra and Ambuja Cement. On the institutional side, surprisingly both FIIs and DIIs were net buyers to the tune of 269 and 489 crores respectively, in the cash market.

On the derivatives side FIIs sold Index futures, worth a mere 40 crores and brought Stock futures, worth a massive 578 crores. Nifty future closed at 4978, with the discount increasing to 19 points, to the spot, along with a moderate loss of open interest. On the Options side, the PCR increased to 1.03, along with a fall in the India VIX by 1.36%. On the Call options side, the 4900 call, lost the maximum open interest, followed by the 4800, 4700 & 5000 calls, on the other hand the 5200 call added the maximum open interest, followed by the 5300 & 5100 calls. On the Put Option side, the 4800 put added the maximum open interest, followed by the 4900 & 5000 puts. The entire activity in the F&O space, indicates there was massive short covering, which led to today's rally. However the silver lining amidst the clouds, was that the FIIs were net buyers in the spot as well as stock futures. 

On the technical side, Nifty has managed to conquer the crucial levels of 4888 and 4950, for the day, on the back of a purely technical pullback, from the oversold levels. The strong pullback in the last three session, including today's pullback, has led to reversal signs in the indicators, both on the daily and the weekly charts, suggesting the momentum might continue for some more time. The levels to watch out for Nifty, will be 5027, 5047 & 5088 on the upside, and 4948,4912 & 4840 on the downside. On the currency front, the Rupee appreciated once again and the USD-INR future closed 55.56 for the day.

On the international markets front the Asian and the European markets have closed on a strongly positive note after the ECB president Mario Draghi said " officials stand ready to act as the Euro regions growth outlook worsens". The U.S. markets are also trading on a firm note, before the Fed publishes its "Beige book survey of business conditions in 12 national districts today". On the energy futures front, both the Brent and the WTI crude futures are trading strongly in the green at 100.67 & 85.27 $/bbl respectively.

SURPRISE

Unexpectedly the markets opened on a mildly positive note, tracking their Asian peers and gained strength as the session progressed. The markets touched their intraday highs within the first half of the trading session, but slowly started loosing their momentum and subsequently touched their intraday low, in the second half of the trading session, but eventually recovered some of their losses at the fag end of the trading session, to close almost flat. The Nifty and the Sensex closed up by 15 and 32 points respectively. The market breadth stayed marginally positive, till the end of the session with 784 advances to 657 declines.On the sectoral front, the Banking sector turned out to be the biggest gainer, while the FMCG sector was the biggest looser. On the individual stock front, LT, Grasim, RelInfra, IDFC & Cairn were the star performers of the day. On the institutional side, the FIIs were net sellers to the tune of 680 crores, while the DIIs were net buyers to the tune of 795 crores in the cash market.

On the derivatives side, surprisingly the FIIs turned net buyers in both the Index and Stock futures, to the tune of 286 and 279 crores respectively.Nifty future closed at 4846, with the discount once again widening to 17 points to the spot, along with a slight fall in open interest. On the options side the PCR fell to 0.94, along with a rise in the India VIX by 2.58%. On the Call option side, the 5000 call added the maximum open interest, followed by the 4900 & 5100 calls, while on the Put option side, the 4800 put added the maximum open interest, followed by the 4900 and the 4700 puts. The entire activity in the F&O space, indicates, some amount of short covering on the futures side, along with massive call writing at higher levels. The FIIs are constantly reducing their positions in the cash markets along with a corresponding build up in the future positions, which once again validates the fact, that every rise is used as a opportunity to exit the market.

On the technical side, Nifty breached the intraday resistance of 4880, and made a high of 4898, but could not close above the crucial mark of 4888. The technical indicators on the daily as well as the weekly charts , do not show any signs of  reversal, which is validated by the data from the F&O space. The levels to watch out for Nifty will be, 4891, 4903 & 4942 on the upside and 4840, 4818 & 4799 on the downside. On the currency front, the Rupee depreciated marginally and the USD-INR future closed at 55.89 for the day.

On the international markets front, the Asian markets have closed on a strongly positive note, while the European markets have closed in the red, but the U.S. markets are trading in the green as equities reversed early losses today as the Institute for Supply Management’s index of non-manufacturing businesses, which covers about 90 percent of the economy, rose to 53.7 last month from April’s 53.5. On the energy futures front, the Brent and WTI crude futures are trading almost flat with a negative bias at 98.74 & 83.94 $/bbl respectively.