Bulls were in command as the key benchmark indices achieved highest closing levels in more than 2-1/2 year highs, as the latest data showed easing of food and fuel inflation in early August 2010, which may reduce the pressure on the central bank for further monetary action to rein in inflation. The BSE 30-share Sensex jumped 197.82 points or 1.08%, up close to 180 points from the day's low and off close to 20 points from the day's high. Data showing sustained buying by foreign funds, underpinned sentiments. Firm Asian stocks also supported domestic bourses.
The market breadth was positive. Banking and financial shares rallied on fresh buying, with HDFC Bank hitting a record high and HDFC and ICICI Bank scaling 52-week highs.
NSE's volatility index, India VIX, a gauge of traders' perception of near-term risks in the market based on options prices, rose 0.79% at 16.53.
Foreign funds have bought equities worth a net Rs 6365.98 crore so far this month, till 19 August 2010, absorbing selling of Rs 3047.42 crore from domestic funds, as per data from the stock exchanges. The details of Foreign funds flow for the last two and half months will be posted tonight.
DERIVATIVE SEGMENTS: Nifty futures opened today on a flat to positive note at 5490 after Thursdayday spectacular last hour rally. It made a intraday high of 5534 and closed finally at 5527. The indices rose for the second day in a row as investor sentiment improved after India’s food inflation eased to 10.35% for the week ended August 07, 2010 amid speculation that the monsoon will boost crop output, buoying economic growth. Easing inflation may reduce the pressure on the central bank for further monetary action to rein in inflation. Turnover in NSE's futures & options (F&O) segment surged to Rs 124648.72 crore from Rs 105674.05 crore on Wednesday, 18 August 2010. Nifty August 2010 futures were at 5,529, at a discount of 11.20 points to the spot closing of 5,540.20. The near-month August 2010 derivatives contracts expire next Thursday, 26 August 2010. Nifty September 2010 futures were at 5,536, at a discount of 4.20 points to the spot closing of 5,540.20.
The Nifty future prices with good gains along with an overall addition of open interest and decline in the cost of carry, indicates some shorts being built at higher levels. On the call options front, some shredding of open interest in August series at strike price of 5500 and 5600 have been seen. On the put options front, open interest in August Series at strike price of 5500, 5400 and 5200 was also seen. In August Series, maximum addition of open interest on the calls front is still existent at strike price of 5500 & 5600 (though some shredding was seen on Thursday) indicating it as resistance zone on the upside whereas on the put options front, addition of open interest at strike price of 5400 indicating it as an immediate support on the downside.
Bond Market: India’s Government Bonds and Rupee weren’t traded today in Mumbai, the Nation’s financial center, as banks were shut for the Parsi New Year day of Navroz.
Market Outlook: US will see flurry of economic data tonight starting with initial jobless claims, followed by Federal Reserve Bank of Philadelphia’s general economic index and leading indicators data.
Market sentiment: The market breadth was strong as advancing stocks outpaced the declining ones. Of the 3,071 scrips traded on the BSE, 1,650 scrips advanced whereas 1,297 scrips declined and 124 shares traded unchanged.
FOR TODAY: As indicated, market may take a breathe. All European, American markets were closed yesterday in deep RED. Asian Markets are trading in RED. SGX Nifty is trading around 5507 indicates that our market will open in a negative note. May be touch 5490 again and try to cover late hours.
ABOVE 5515, GO LONG IN NIFTY FUTURE WITH STOPLOSS 5500 AND BELOW 5500 GO SHORT WITH STOPLOSS 5515; WILL UPDATE DURING TRADING HOURS; PLEASE CHECK COMMENTS SECTION.
