Bears run berserk for yet another session; short covering in final hours heaves Nifty above 4,600 mark

Bears hammered bulls throughout the session giving bulls no chance to pounce back, taking full control over the market, bears dragged Nifty below its crucial 4,650 mark. Although trade continued on pessimistic note but bears did get some respite in final hour of trade, which to an extent trimmed the level of damage caused to the market. Even after getting a gap down start and plunging below 4,600 mark, 50 share barometer index- Nifty-by the end of the trade found some support above key bastion of 4,550 mark. The negative start witnessing bloodbath in early trade was on concerns over slowing industrial growth amid a weakening trend on other Asian bourses and persisting worries about the European debt crisis.

Back home, selling pressure accentuated tracing Asian pacific markets which started the trade on pessimistic note only to end in red. Death of North Korean leader - Kim Jong's added a dangerous layer of instability to the Korean peninsula, which besides weighing on the Asian pacific markets have also minced the sentiment at home turf. Selling pressure at Dalal Street although was arrested as benchmark indices after losing substantial ground were oscillating in tight band. However, later pessimism gripped markets, which led to benchmark indices falling for the lowest point of the day in the afternoon session. Discouraging developments from Europe continued to dissuade investors amid heightened worries that potential credit ratings downgrades of several Euro-zone nations may derail progress towards resolving the region's onerous debt problem.

Much to the trader’s delight, some comfort came to the markets with European shares, which heaved the 50 share index- Nifty- ending above the 4,600 level. Most of the sectoral indices on the NSE were hammered badly; however, CNX PSU Bank remained the major loser, losing 3.58% followed by Bank Nifty down 3.07% and CNX Realty down by 2.83% in the trade.

The India VIX witnessed an addition of 2.99% at 30.58 as compared to its previous close of at 29.69 on Friday.

The 50-share S&P CNX Nifty lost 38.50 points or 0.83% to settle at 4,613.10.

Nifty December 2011 futures closed at 4,613.75 at a premium of 0.65 points over spot closing of 4,613.10, while Nifty January 2011 futures were at 4,635.00 at a premium of 21.90 points over spot closing. The near month December 2011 derivatives contract expires on Thursday, December 29, 2011. Nifty December futures saw addition of 9.43% or 2.02 million (mn) units taking the total outstanding open interest (OI) to 23.51 mn units.

From the most active contract by contract value, SBI’s December 2011 futures were at a premium of 0.85 point at 1626.85 compared with spot closing of 1626.00. The number of contracts traded was 39,621.

Axis Bank December 2011 futures were at a discount of 15.10 point at 835.55 compared with spot closing of 850.65. The number of contracts traded was 23,957.

Tata Motors December 2011 futures were at a discount of 0.70 at 179.30 compared with spot closing of 180.00. The number of contracts traded was 21,765.

L&T December 2011 futures were at a premium of 7.00 points at 1035.30 compared with spot closing of 1028.30. The number of contracts traded was 17,614.

ICICI Bank December 2011 futures were at a premium of 4.00 point at 659.90 compared with spot closing of 655.90. The number of contracts traded was 26,329.   

Among Nifty calls, 4700 SP from the December month expiry was the most active call with an addition of 0.33 million or 7.25%.

Among Nifty puts, 4600 SP from the December month expiry was the most active put with a contraction of 0.34 million or 6.23%.

The maximum Call OI outstanding for Calls was at 4700 SP (4.96 mn) and that for Puts was at 4600 SP (5.87 mn).

The respective Support and Resistance levels are: Resistance 4638.86-- Pivot Point 4597.38-- Support 4571.61.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.87 for December -month contract.

The top five scrips with highest PCR on OI were Patni 11.81, Voltas 7.00, Cipla 1.76, Siemens 1.36, Welspun Corporation 1.31 and ACC 1.24.

Among most active underlying, SBI witnessed an addition of 1.24% of Open Interest in the December month futures contract followed by ICICI Bank which witnessed an addition of 0.75% of Open Interest in the near month contract. Meanwhile Reliance Industries witnessed an addition of 3.75% in the December month futures. Also, Tata Motors witnessed an addition of 12.21% in Open Interest in the December month contract. Finally, Axis Bank witnessed an addition of 18.87% of Open Interest in the near month futures contract.