Markets and Macros!

Nothing much has changed from yesterday and today and it seems we are still in the pain of 100 point fall yesterday. The most important point is the CPI inflation number for October that comes at 3.58 vs 3.28 seen in September and 4.20 seen last year same month. That means we are on the upside spiral of CPI and food inflation also jumped to 1.9% vs 1.25% seen last month. The biggest culprit is fuel inflation that is at 6.36%. Vegetables added to the woes by growing at 7.5%. All this means that we are not going to see any rate cut in 2017 and probably in FY18. This means a huge negative for bonds and for sure we are at 7% today.

On the derivatives front!

There is some silver lining seen now, with NIFTY futures premium going up to 44 rupees from 12 rupees. This is primarily due to short covering that happened when NIFTY fell sharply in the afternoon. There was also some buying that was seen. But options market is suggesting otherwise. There was a heavy shorting of 10400 and 10500 calls with 1.9 and 1.7 lakh contracts respectively. Even 10300 call is being shorted at surprisingly 10200 put has seen some unwinding indicated by change in the open interest. The action is now moved to 10100 and 10000 put that has 50 and 30 rupees premium. That puts NIFTY at the risk of touching 10000 mark again.

So what is the NIFTY call for today?

Be cautious. The open will be around 10220 and its a sell on rally market still. That means if NIFTY touched 10250 and struggles to go up a short position can be attempted. There is some support at 10180 and that can be the target for the short position. If you are uncertain stay away and wait for the right opportunity to make the next move.

Q2 results scheduled for today

1. Bank of Baroda
2. Bata
3. Cadila health
4. Ceat
5. Cox and kings
6. Eicher motors
7. Fortis healthcare
8. GAIL
9. Grasim
10. Karur vysya bank
11. Sun pharma
12. Tata global