Market Snapshot
The Sensex opened 32 points higher at 12,917. After exhibiting volatility in early trades, the index surged to a high of 13,057 on the back of steady buying in BHEL, HDFC, TCS, Bharti, HLL and Wipro. However, unabated selling in ITC and cement shares forced the index to pare gains and slip into the negative zone in the latter half of the day. The index dropped to a low of 12,845 - down 212 points from the day's high. The index rebounded at close, and finally finished with a marginal gain of 18 points at 12,903. The Nifty was up 16 points to 3,734.
The NSE & BSE cash volumes were significantly lower compared to the previous day at INR 83 bn and INR 34 bn. The F&O volumes were also lower at INR 266 bn.
Sentiment Indicators
The Implied Volatility (IV) across Nifty strikes has slightly increased to 29-32% levels. The WPCR of Nifty Options increased to 1.03 compared to the previous day while the 5 day average is 0.93.
Outlook
In absence of any major news flow from global markets we expect the Indian markets to open slightly positive taking strength from strong IIP numbers. We recommend caution to investor as undue volatility can come in as the markets look for a direction. The Nifty will be range bound in today’s trading session and we expect fresh selling to come in above 3780 levels.
FII’s have been huge buyers to the tune of 865 cr INR in Index futures and the provisional figures for cash are 130 cr INR. This underlines the investor’s view of taking positions in broader markets instruments over single stock exposure.
We continue to be bullish on Telecom, IT and advice long term investors to take smaller exposures and capitalize on bigger price swings.
The Nifty continues to face resistance near its 13 DMA currently at 3789. Nifty is in a consolidation phase and we expect it to be choppy in the short term future. In the immediate term Nifty has a support at 3713 and 3684. On the upper side the Nifty has a resistance at 3767 followed by 3791.