RELIEF

The markets opened on a very sluggish note and continued to trade in the same range till the start of the second half of the trading session, but within half an hour of the start of the second half, the markets made a almost vertical rise and continued to rise for the next two hours and with just one hour left for the end of the day’s session the markets started falling once again and gave almost all their gains till the end of the session and ended up almost flat. The Nifty and the Sensex closed, up by 13 and 33 points respectively. On the sectoral front, the IT sector was the biggest gainer, followed by the Banking, Midcap & Auto sectors, on the other hand the FMCG sector was the biggest loser for the day. On the individual stocks front, Ambuja Cements, Wipro, Infosys, ACC & JP Associate were the top five Nifty gainers for the day, while BHEL, ITC, Bharti Airtel, IDFC & Ranbaxy were the top five Nifty losers for the day. On the institutional side, there was very little participation, with FIIs turning net buyers to the tune of 167 crores and DIIs turning net sellers to the tune of a mere 34 crores in the cash market.

On the derivatives side, the FIIs were net sellers in Index futures to the tune of 296 crores and net buyers in Stock futures to the tune of 139 cores. Nifty future settled at 5261, with 23 points premium to the spot along with a considerable loss of open interest. On the option side, the PCR increased to 0.93, with a marginal fall in the India VIX by 0.18%. On the Call options side, the 5300 call added the maximum open interest, followed by the 5400, 5600 & 5200 calls, while on the Put options side, the 4900 put added the maximum open interest, followed by the 5000, 5200 & 5100 puts. The entire activity in the cash as well as the F&O markets, indicates very little change since yesterday, but the call writing continued at higher levels along with addition of long positions on the put options side, due to the absence of sustained support from the cash markets and this is why the markets lost all their gains at the end of the day.

On the technical side, Nifty managed to hold on to the 5200 level, albeit on falling volumes but much of the relief from the sustained fall, came in anticipation of the positive news from the Eurozone and with the much expected outcome in place, the markets participants may cut their short positions and look forward to further news flow to take affirmative action. The levels to watch out for Nifty will be, 5260, 5284 & 5293 on the upside and 5217 & 5196 on the downside. On the currency front, the Rupee snapped its three day losing streak, boosted by corporate dollar sales and gains in the Euro. The Rupee finally settled at 55.65, while the near month USD-INR future settled at 55.89 for the day.

On the international markets front, the Asian markets have closed on a flat note, while the European markets have closed on a very strong note and the U.S. markets are also trading on a very firm note after the ECB announced specifics of its bond buying plan and the economic data boosted the optimism in the American labor market. On the energy futures front, both the Brent and WTI crude oil futures are trading up, by more than a percent at 114.10 & 96.38 $/bbl respectively, on the back of more than expected fall in the weekly U.S. crude oil inventories and the Natural Gas future is trading up by 1.31% at 2.83 $/MMBtu on the back of fall in the weekly U.S. Gasoline inventories.

SOMBRE

The markets opened on a dismal note, once again for the ninth consecutive session and continued to trade range-bound in the first half of the trading session, but at the start of the second half of the trading session, things became worse and the markets touched their intraday lows, within the next half an hour. The markets  continued to trade in the same range, till the end of the session and ultimately both the indices closed near their day’s low. The Nifty and the Sensex closed, down by 48 and 128 points respectively. The market breadth was also extremely negative with 594 advances to 883 declines. On the sectoral front, the Banking sector was the biggest loser, followed by the Pharma, Metals & Energy sectors, on the other hand the FMCG sector was the sole gainer for the day. On the individual stocks front, Bharti Airtel, Hind Unilver, TCS, ONGC & ITC were the top five Nifty gainers for the day,on the other hand BHEL, Axis Bank, Jindal Steel, Tata Steel & ICICI Bank were the top five Nifty losers for the day. On the institutional side, FIIs & DIIs were net sellers to the tune of 189 and 166 crores respectively in the cash market.

On the derivatives side also, the FIIs were net sellers in both Index and Stock futures to the tune of 387 & 514 crores respectively. Nifty future settled at 5253, with 27 points premium to the spot, along with a moderate loss of open interest. On the Options side, the PCR stood at 0.85, along with an increase in the India VIX by 2.53%. On the Call options side, the 5300 call added the maximum open interest, followed by the 5500, 5200 and 5400 calls, while on the Put options side, the 5000 put added the maximum open interest, followed by the 5200 and 4900 puts, on the other hand the 5300 put lost the maximum open interest, followed by the 4800 and 5500 puts. The entire activity in the cash as well as the F&O markets, indicates that while there was little participation in the cash markets, the selling in the Index and stock futures clears sums up the negative mood. On the options side, while there has been substantial call writing at higher levels, there has been no meaningful addition of shorts on put options side and there has been liquidation of longs on the Index futures side , in four out of the last five sessions, which suggests that although the markets are correcting, but there are no considerable short positions in the market and the selling has been mainly sector specific, which has led to a sustained fall in Nifty.

On the technical side, Nifty somehow managed to stick its neck above the 5200 mark, but the continuous selling in the key contributors to Nifty may lead some more panic reaction and take the Nifty to unreasonable levels. The levels to watch out for Nifty, will be 5242 & 5277 on the upside and 5202, 5189 & 5162 on the downside. On the currency front, the Rupee, fell to its lowest level in three weeks, weighed down by the losses in the domestic stocks and skepticism about the ECB’s ability to formulate a concrete plan to help the debt-laden euro zone economies. The Rupee finally settled at 55.90, while the near month USD-INR future settled at 56.12 for the day.

On the international markets front, the Asian markets have closed deep in the red, and the European markets have closed on a mixed note, while the U.S. markets are fluctuating between gains and losses on speculation that the ECB will act to tame the region’s debt crisis. On the Energy future’s side, the Brent crude oil future is trading down by 0.81% at 113.25 $/bbl, while the WTI crude futures is trading almost flat at 95.29 $/bbl and the Natural gas future is trading down by 2.30% at 2.78 $/MMBtu.