Bulls Vs Bears

After the initial gap up the bulls let the market slip again. However late in the afternoon the bulls consolidated and took control. Nifty closed above 17100 up 114 points. Bank Nifty also closed on a positive note. It was by 465 points and is now trading at 39598. Nifty bank fell sharply during the first half of the session before it gave a strong pullback to close near the high of the day.
European markets traded higher buoyed by positive sentiments as the banking sector stabilised after regulators intervened. US Futures is expected to open mixed and remain volatile as today is the day when the stock index futures, stock index options, stock options and single stock futures are set to expire at the same time known as quadruple witching. Dow Jones futures is trading 112 points down as we write.
The Peoples Bank of China (PBOC) said that it will cut the Reserve Requirement Ratio (RRR) by 25 bps. This would help lower funding costs for the banks and will further economic activities. The timing of the RRR cuts is to be seen in the backdrop of rate hike scenarios in the US and Europe.
The Nifty advance decline was significantly better than yesterday’s as 1384 stocks advanced while 844 stocks declined and 120 stocks remained unchanged.
IndiaVix cooled off further and traded at 14.72 down over 9%. The environment seems to be building up for a pullback. If the pullback sustains it can be a positive case for a bull trend.
FIIs were net sellers today and sold Rs.1767 crore in the cash market. On the other hand, DIIS were net buyers at Rs. 1817 crore.
Stocks
The top gainers in the Nifty 50 included HCL Tech (+3.36%) Hindalco (3.05%) UPL (+2.76%). The top losers included Eicher motor (-2%), ITC (-1.55%), NTPC (-1.48%)
HDFC– HDFC Bank merger has been approved by the NCLT. This is a positive development for both the stocks.
Tata Consumer has ceased its negotiations with Bisleri acquisition. The deal had an estimated value of Rs.6000-7000 crore. The stock was up on this news by 1.76% reflecting positive sentiment.
Biocon came down sharply in the last 15 minutes as it closed 8.8% down. Biocon in an interview has said that the recent acquisition of Viatris has resulted in debt. It is also seen raising equity to offset some debt in Biocon Biologics.
The last half an hour saw some sharp volumes in stocks due to FTSE Bharat 22 ETF rebalancing.
Stocks that expected outflows due to the rebalancing included TCS, Axis Bank, Reliance Industries, Hindustan Unilever, LT Gillette, and Eris Lifesciences HPCL. The inflows due to stock inclusion in the FTSE included Kotak Bank, Patanjali, Jindal Stainless Steel, Bharat Dynamics and others.
Sectors
Sectors that were in green included Nifty realty, Nifty metal, Nifty fin services, Nifty bank Nifty IT. The sector that lost today included Nifty FMCG, Nifty auto, Nifty healthcare, Nifty pharma and Nifty media.
Open interest
The total open interest (OI) for the Current week’s expiry for Nifty calls were at 8.71 crores and for the puts were 5.96 crores. OI addition to the calls today were 2.74 crores as compared to 2.29 crore inputs. The addition of OI to puts at 17000 strike indicates good support.
The bulls are warming up
Nifty close above 17000 is a confidence booster for the bulls. The bulls are warming up for an up move as most of the negatives that came in last week is taken care of.