CAUTION

The markets opened on a negative note, after two consecutive days of back to back rallies, and were clearly in a profit booking mode, ahead of the weekend and continued to trade with a negative bias throughout the trading session, but touched their intraday lows in the second half of the trading session, before making a almost V shaped recovery from this point onwards, to finally close in the positive zone. The Nifty and the Sensex closed, up by 19 and 70 points respectively. The market breadth also improved considerably by the end of the session, but finally closed on a negative note, with 690 advances to 750 declines. On the sectoral front, the FMCG sector was the biggest gainer, followed by the banking sector, on the other hand the IT sector was the biggest looser for the day. On the individual stock front, Rel Infra, Sterlite, Gail, LT and IDFC were the stocks which managed to buck the trend. On the institutional side, FIIs were net buyers to the tune of 202 crores, while the DIIs were net sellers, to the tune of a mere 81 crores in the cash market.

On the derivatives side, FIIs sold Index futures worth 163 crores, and brought stock futures worth 275 crores. Nifty future closed at 5059, with the discount narrowing down to, just 9 points to the spot, along with a moderate fall in open interest. On the Options side, the PCR fell to 1.10, along with a slight fall in the India VIX by 0.72%. On the Call options side, the 4900 call lost the maximum open interest, followed by the 5300 & 4800 calls, on the other hand the 5200 call added the maximum open interest. On the Put options side, the 5000 put added the maximum open interest, followed  by the 5100, 4500 & 4700 puts. The activity in the F&O space, indicate that the  recovery at the end was mainly due to short covering in the Index as well as the stock futures, but the better part was that, the FIIs were net buyers in the Index and stock futures. In the medium  term, the open interest position shows, Nifty will face considerable resistance in the 5100 - 5200 range.

On the technical side, Nifty managed to close above, yet another psychological mark of 5050 and at the same time it has managed to close above most of its short term moving averages on a daily basis ,but very shortly the markets are about to enter the overbrought zone. On the weekly charts, a lot needs to be done , before this up-move really becomes a trend. Going forward the levels to watch out for Nifty, will be 5103, 5138 & 5150 on the upside, and 5000, 4967 & 4946 on the downside. On the currency front, the Rupee depreciated once again and the USD-INR future closed at 55.66 for the week.

On the international market front, the Asian and the European markets closed on a negative note, while the U.S.markets closed on a firm note for the week, but the real problem that has cropped up is Spain, which has become the biggest euro economy, so far to seek international aid of 125 billion USD , to rescue its banking system and the markets will react favourably tomorrow if suitable policy action is taken. On the energy futures front, both Brent and WTI crude futures have closed at 99.47 & 84.10 $/bbl for the week, while Natural gas futures managed to recover some of their losses and closed at 2.29 $/Mmbtu. On the precious metal front, Gold managed to close almost flat at 1591.40 $/t.oz, while Silver closed marginally down at 28.47 $/t.oz for the week.

EXUBERANCE

The markets opened on a strongly positive note, buoyed by the positive vibes from the government on the policy front. The markets gained momentum with the progressing session, but just like yesterday, the markets rose at a franctic pace, at the start of the second half of the trading session and ultimately closed at the highest point of the day. The Nifty and the Sensex closed up by 53 and 195 points respectively for the day. The market breadth was evenly balanced with 848 advances to 589 declines. On the sectoral front, once gain Banking sector was biggest gainer, followed closely by the FMCG, Energy and Midcap sectors.  On the individual stocks front there were quite a few star performers for the day, led by JP Associates and followed by Axis Bank, ICICI Bank, HDFC Bank, Sterlite Industries & Sesa Goa. On the institutional side, surprisingly FIIs turned net buyers, to the tune of a massive 675 crores for the second consecutive session, while the DIIs were net sellers to the tune of a mere 34 crores in the cash market.

On the derivatives side, FIIs were net buyers in the Index and Stock futures, to the tune of a whooping, 1132 and 641 crores respectively. Nifty future closed at 5029, with the discount, once again increasing to, 21 points to the spot, along with a considerable increase in open interest. On the options side, the PCR increased to 1.12, along with a sizeable fall in the India VIX by 5.06%. On the Call options front, the 5000 call, lost the maximum open interest, followed by the 4800 & 4900 calls, on the other hand the 5400 call added the maximum open interest, followed by the 5100 & 5500 calls. On the Put options side, the 4900 put added the maximum open interest, followed by the 5000 & 4700 puts. The entire activity in the F&O space indicates, short covering along with creation of fresh longs, which is validated by the FII data from the cash and futures market.

On the technical side, Nifty conquered, yet another level of 5050 and managed to close above the psychological mark of 5000. In order to validate the upmove, Nifty has to close above the 5000 mark. for a few more sessions and the technical indicators, indicate there is still some more steam left, before the markets become overbrought. The levels to watch out for Nifty, will be 5069, 5094 & 5121 on the upside and 5017, 4986 & 4965 on the downside. On the currency front, the Rupee appreciated considerably and the USD-INR future closed at 55.07 for the day.

On the international market front, the Asian and European markets have closed on a  strongly positive note, while the U.S. markets opened on a firm note, after China cut interest rates for the first time since 2008, to bolster growth in the world's second largest economy, but the equities pared gains after the Fed chairman, said the central bank will assess the economy, before deciding if more stimulus is needed. On the commodities front, both Gold and Silver are trading deep in the red, after a few sessions of smart gains, while both Brent and WTI crude are trading almost flat at 100.70 and 85.30 $/bbl respectively, and Natural gas is trading deep in the red, after a unexpected rise in the Natural gas inventories.