The Indian markets were up 1.2 % for the week and went against the falling trend, was supported by strong global cues. The food inflation moved up to 10.6 % in India. The valuations in India are on the higher end at 22 time’s forward Vs 16 times in the other emerging markets. The FII’s have been buyers through last week; they are holding the Indian markets up. We need to see if they will continue the momentum of buying or will start selling during the redemption period of Sept/Oct. In the meanwhile Reliance brought into EIH (Owners of the Oberoi group of hotels), seems like a plan to de risk their plan in the Volatile Petroleum business and move into stable business opportunities. The Auto nos. came in better than expected driving the markets up further. The global markets have turned volatile off late and there is an uncertainty of which way the markets will move.
This week the Indian markets will move bases on Global cues and also the run up to the advance tax nos. The US has had some descent employment nos., we need to see if they can sustain the same. The Unemployment nos. still rule at 9.6 % which is very high.
The derivatives position for the week stands at ` 169913 Crs in OI; the PCR is at 1.39 the option IVs for Calls at 13 % & Puts at 17 %. The interesting part is the Put addition has not been very high during the week. The Call options have the lowest volatility in a long time.
Nifty on 20th August: 5479
For the week: Sell Nifty @ 5520 levels for a Target of 5350 SL: 5530