1. Market Wrap Up
Jan 6, 2011
The benchmark equity indices continue to trade in the downward direction, in view of the jump in food inflation that rose above 18% for the
week ended December 25, 2010. Meanwhile the global cues remain mixed as rest of the Asian markets settled mixed while major European
markets opened positive and Dow future too traded in green but these cues were unable to lift the sentiments of the local markets.On the
sectoral front, keeping up the momentum are stocks from TECk, and Information Technology space, while, stocks from Reality, Capital
Goods, Fast Moving Consumer Goods (FMCG), Auto and Consumer Durables counters are down and out. The broader indices too have
surrendered to the selling pressure as both Midcap index and Small cap index have bowed down by 1.1% and 0.93% respectively. The
market breadth on the BSE is extremely negative. Banking counters continued to witness hammering from the bears.
Food inflation accelerated to the highest level in more than a year in late December 2010. The food price index rose 18.32% and the fuel
price index climbed 11.63% in the year to 25 December 2010. Annual food and fuel inflation stood at 14.44% and 11.63% respectively in the
prior week. The primary articles price index was up 20.20% in the latest week, compared with an annual rise of 17.24% a week earlier.
The government deferred its decision to free the prices of urea for now and bringing it under the Nutrient Based Subsidy (NBS) policy regime
even as a panel of secretaries has been asked to work out a viable model for decontrolling the prices. Union petroleum and natural gas
minister Murli Deora said that his ministry was not in favour of raising diesel and cooking gas prices despite a spurt in global prices of crude
oil.
The BSE 30-share Sensex was down 116 points or -0.57% at 20185 while NSE 50-share Nifty ended the day at 6048 down 32 points or -
0.52%.
Stocks Performance Top 3 Sensex Gainers:
Hindalco Ind (+1.7%),
Cement Stocks: Ultratech (-5.8%), Ambuja cement (-5.2%), ACC (-4.3%)
TCS (+1.4%),
Cement stocks declined after a global ratings firm Fitch forecast a negative to stable outlook for the
NTPC (+1.3%)
cement sector in 2011, on continued cement overcapacity leading to pressure on prices.
Top 3 Sensex Losers:
Fertiliser Stocks: Chambal Fert (-8.3%), Nagarjuna Fert (-7.2%), National Fert (-6%)
Sterlite Ind (-3.8%),
The government deferred its decision to free the prices of urea for now and bringing it under the Nutrient
Bajaj Auto (-3.6%),
Based Subsidy (NBS) policy regime even as a panel of secretaries has been asked to work out a viable
ONGC (-3.2%)
model for decontrolling the prices.
F&O Update
Top Sectoral Gainers:
NIFTY Benchmark lost 32 points while VIX went UP to 18.20% increasing by 1.78% from Wednesday’s level. IT (+0.5%),
At the money NIFTY option IV were at level of 16-17 % on Call side and 16-17% on put side. PCR is at level TECk (+0.4%),
of 1.22 which has decreased from Wednesday’s level. On put side Maximum OI is at 6000 strike level while
same added most open interest today. We can expect 6000 Level to act as a strong support in near term
while technically we think 5980-90 is a support zone. Call side has maximum OI at 6200 and 6100 added
most OI on Thursday, indicating immediate resistance at this level. January NIFTY futures gained premium
over the spot to magnitude of 28 benchmark points, which is higher than yesterday’s position. We haven’t
seen jump in VIX or IV that is usually associated with correction, while PCR is constantly decreasing. IV is
relatively low and its reasonable to go long on options rather than selling them. We are of the view that
Market would have some more correction before resuming their uptrend.
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