The markets opened with an overhang of the weakness in the US markets over the weekend session, but recovered by close as the domestic F&O expiry considerations came into play.

Traded volumes were lower than the previous session as the tight rangebound intraday movement kept short-term traders at bay.

Market breadth was marginally positive as the BSE & NSE combined advance-decline ratio was 2047 : 1612. The capitalisation of the market breadth was also positive as the combined exchange figures were Rs 7933 cr : Rs 4521 cr.

The indices have closed at the upper end of the intraday range on poor volumes as the pre-expiry short squeeze saw the bears squaring up their shorts.

The market remaining positive was a sign of optimism lacing the undertone and the main trigger for the domestic markets in the absolute short term will be the F&O expiry.

Barring the technology sector, which is dragging the broader markets lower due to its sheer weightage in the benchmarks, the overall outlook may remain neutral to positive in the near term.

The pointers to the actual risk appetite of the rank and file players will come from the midcap segment which has many scrips out of the F&O list and therefore invites aggressive traders by and large.

The 4242 significant inflection point as per Gann swing method was not violated on a consistent trade basis and therefore further attrition was averted in the markets. This level remains an important level to watch as day traders are likely to press sales below this mark.

The outlook for the markets on Tuesday is that of continued consolidation (subject to overseas cues) and the action is likely to be focused on the top ten heavyweights with the highest concentration of futures positions as traders rollover / square up their exposure on these counters.


Very inconclusive start to week

A very inconclusive start to the week. On the Nifty, the 4,250 level was maintained and defended; but nevertheless, we didn’t go anywhere in today’s market. A 100-point band of movement for the Sensex and about 30 odd points for the Nifty. That was how narrow the movement cycle was in today’s session. But net-net we closed out very flat - as flat can be, on not just the benchmark Indices, but also the broader markets.

The advance-decline ratio was also neck-to-neck at closing bell. So, clearly no directional cues were coming in from the broader markets as well. On the turnover front, there was heightened activity, particularly in the last hour of trade. We had almost 50,000 plus in terms of total turnover, with a significant chunk coming in from the Futures and Options side.

Cash market was more muted - closer to about Rs 8,000 crore traded in total for that market. If we take a look at, of course the Futures and Options side - remember it is the F&O expiry week; so we saw rollovers picking up 25% for the Nifty rollover. And of course, for the June series, we saw a discount of about 17-20 points with the July series discount winding to about 28-30 points. So things were looking quite heated in the F&O segment.

In stock-specific action, ONGC lent support with a 1% plus on that stock. There wasDabur, which was very strong in today’s market. GSK Pharmaceuticals and Reliance Petroleum - one stock that gets really excited during rollover or a start of the new series - were all up in the green and well in today’s session.

Telecom lent support; Bharti Airtel and Reliance Communications, both were strong in today’s market. Cement came up and showed strength. There was ACC and Ambuja and both managed to close the day in the green; and of course, the capital goods story continues to buzz on the bourses.

Among the broader market participants, there were smaller sectors, which moved up and on strong volumes. Kajaria Ceramics and Nitco Tiles from the Ceramics space were very strong. There was movement in the paper segment - BILT and TNPL, both stocks moved up and strongly.

Midcap cement such as Prism Cement and Gujarat Sidhee Cement made their moves in today’s market and of course real estate also came back with infrastructure up as well. Ansal Properties, Indiabulls Real Estate, Lanco Infratech and GMR Infrastructure were couple of the gainers in that space.

In individual stock performances, there was Cinemax, which was quite lively; Chennai Petro and Yes Bank, which is looking at issuing two crore shares at a price of Rs 225, to raise about Rs 450 crore; that stock also closed up well in the green in today’s session.

What is important is that we have four more days to go till expiry and we are still defending the 4,250-mark. Let us see where the markets
take it from here, in the light of global cues starting tomorrow. Of course, this week will also see interest rate decisions coming by from the US.
So, let us see how the markets pan out.




Flat close for mkts: To move sideways now, say experts

Blame it on the gloomy weather or just the negative cues from the overseas, the markets were sluggish and finished the day with a whimper. The global cues that greeted the markets were murky and expectedly the indices traded with a negative bias through the day. Volumes too were dismal in spite of the expiry being just three days away. The cues from Asia were not positive either, with Europe also opening in red.

Selective buying was seen in telecom, cement, oil and capital goods stocks. The midcap index opened firm, but slipped later to end flat inline with the benchmark indices. Smallcap index closed in green outperforming the frontline indices. Participation was on the lower side and the breadth did not do a whole lot. Nifty closed at 4,259, up 7 points, while Sensex shut shop at 14,487, up 20 points.

Dilip Bhat, Fundamental Analyst at Prabhudas Lilladher has a view that broadly, the direction for markets is definitely upwards. “At worst, I still feel that market perhaps could fester more on the sideways. But otherwise, I think the broad direction of the market should continue to be upwards and it will be very conspicuous by its volatility,” he says.

A lot of market players have been very apprehensive about a correction being in the offing with the market in a technically well-liquidated kind of scenario at the moment. Probably there is some fatigue factor which has come in and the valuations certainly don’t look all that cheap with is a lot of primary issues really around the corner. So all these things really make people not willing to commit in the secondary market immediately.

BSE member Dipan Mehta expects a sideways movement or a selective movement at best in the market. He asked investors to have a wait and watch position and if possible reduce their positions.

Mehta added that this earnings season would be extremely important given the fact that there was appreciation of the rupee and high interest rates.

“First one or two weeks if the earnings do not come out well, players in futures market would tend to square up their positions and that point of time, we would see volatile and violent reactions” he feels.

On whether market will touch new highs, experts feel that largely the mood is positive and people are waiting for the new high for Nifty as well as Sensex.

"We have shown strength, especially, even a market move to a lower level. We have seen buying emerged at those levels. So it’s little disappointing that we aren’t seeing shorts covered in this settlement. But broadly, I would say that I am expecting 15,000 levels in the market," adds Sharmila Joshi of Asit C Mehta Investment .