Markets end flat amid choppy trade; midcaps outperform

05 May 2009

It was a lacklustre day for the markets, after Monday's sharp rally. Both the equity benchmarks witnessed volatility throughout the session. However, the broader indices outperformed the benchmark indices on the back of huge buying in sugar stocks.
 
Buying was seen in capital goods, realty, metal, private power companies' shares and in individual stocks like ICICI Bank, Reliance Communication, Wipro, Tata Motors and Ranbaxy Labs. However, oil & gas, FMCG, select financials and technology stocks remained under pressure.

The 30-share BSE Sensex swung 212 points between an intraday high of 12,197.88 and low of 11,985.88, before closing the session at 12,131.08, down just 3.67 points or 0.03%. However, the 50-share NSE Nifty was up 0.22% or 7.9 points, to settle at 3,661.90, after witnessing swing of 63.45 points between a day's high/low of 3682.20 and 3618.75, respectively.

Broader indices - the BSE Midcap Index was up 1.85% or 67.58 points, to 3,718.87 and the Smallcap Index rose 1.98% or 80.88 points, to 4,162.58.

Rahul Mohindar of viratechindia.com said, "The backdrop of the Nifty still looks bullish and I continue to maintain that we probably are going to first see levels like 3,720 before we back off for any kind of major pullback. The levels to keep in mind from a short-term perspective would be – if 3,600 breaks maybe we would go down, fill up that gap area around 3,500 but again I don't see something more serious than that happening on a pessimistic side."

The 3,600 puts added about 5 lakh shares and at the higher level, the 3,700 calls added about 4 lakh shares.

Karun Mutha, Vice President, Risk & Arbitrage Trades at IL&FS Investsmart said, "We have seen some huge short covering happening on the markets and lot of new fresh positions on puts of 3,600 being build up, so that would act as an immediate support for the market. On the higher side there have been spreads going on between the Nifty calls strikes of 3,600 and 3,800 so investors are buying 3,600 calls and selling 3,800 calls wherein they are expecting the new range to be probably 3,600-3,800. So there is a lot of momentum in some of the midcap single stock futures and the rally continues to be looking good."