Market choppy ahead of May expiry

Key benchmark indices continue to move between gains and losses as choppiness set in ahead of the May series futures & options expiry.

The 30-share Bombay Stock Exchange (BSE) Sensex is trading marginally in red at this hour dragged down by losses in Tata Motors, ONGC and ITC.

Broader markets once again resumed their rally on hopes of better economic prospects as the recently elected Narendra Modi-led Bhartiya Janata Party government is largely expected to kick start the economy.

BSE small-cap index is trading 1% higher while BSE mid-cap is up 0.5%, against the benchmark Sensex's near flat movement.
 

The BSE Sensex index is trading 6 points lower at 24,556 levels while 50-share Nifty index is up 8 points at 7,326 levels. HDFC Bank's 2% uptick alongwith Infosys's over 1% movement helped the benchmark Nifty stay in the green zone at this hour.
 
"Nifty has been taking immediate support around 7250-7270 range and some resistance is emerging at 7360-7370 levels. Even though these support and resistance zones are breached this market as of now seems to be in broader range. On lower side, 7200 is good support and 7500 is strong resistance," said Siddarth Bhamre -Head of Equity Derivatives and Technicals at Angel Broking.

 
On F&O he was of that "rollover so far has been in-line with averages in terms of percentage but positions have increased in terms of open interest compared to last series. When positions were getting rolled over from April to May series, we saw FII’s reducing their positions and as a result open interest in index futures got reduced substantially. However, now post-election verdict most of the positions which got formed and are now being rolled over which has led to rise in open interest, are more of domestic participants."
 
Most of the traders are still stuck in their long calls positions formed just prior to election results. These calls were mainly of strike prices of 7500 and beyond ranging upto 8000 levels. And hence any significant upside may now take place only after expiry.

 
Losses in Tata Motors, ONGC, M&M, ITC anD SBI were somewhat balanced by gains in HDFC Bank, Infosys, UltraTech and TCS.
 
Foreign Institutional Investors (FIIs) were net sellers on stocks worth Rs 202.61 crore , as per provisional data from the
exchanges.
 
The Indian rupee was trading lower at Rs 59.03 compared to the previous close of Rs 59 on the back of demand for dollar from oil importers. The US dollar firmed up against a basket of major currencies early on Wednesday, on the back of encouraging US economic data and another record high on Wall Street.

 
IT stock rebounded from lower levels on rupee weakness. The BSE IT index which tracks top software stocks was last seen trading over 1% higher at 1325hrs. HCL Tech and Mindtree are up 2-3% followed by Tech Mahindra, Infosys and Wipro
  which edged 1% higher.
 
Asian Markets opened on a positive note on the back of encouraging economic data from U.S.  An unexpected hike in durable goods orders in the month of April and higher home prices for the month of  March set a positive tone for investors, who are basically using this week to prepare for next week's ECB meeting. Services industries, which dominate the economy, also grew rapidly in May. Japan’s Nikkei is up .2%, Heng Seng rose 1%. In addition, Straits Times Index and Shanghai Composite Index are marginally increased by .04% and .18%, respectively.

 
Market breadth was strong with 1743 gainers and 1001 losers on the BSE.