Nifty ends down fifth straight day, RIL tumbles 3%

It seems to be never-ending downfall where bears took control over the Street and set up camp for good as the index ended lower for the fifth straight day. After trading in the red for most part of the day’s trade, market turned green in late noon trade but, 90 degree sell off took place in last half an hour of trade with selling pressure in heavyweights like Reliance Industries (RIL), Larsen & Toubro and Bharti Airtel. The three shares have accounted for a 100 point fall in the index and Nifty ended the session with a cut of about one and half a percent below its crucial 4,550 mark.

After a positive opening, market turned choppy on the back of persistent selling by foreign funds and the index breached its crucial 4,600 mark. Afterwards market traded near range-bound due to lack of any positive trigger. Moreover, Jittery investors lacked conviction to build positions as worries over the outlook of markets intensified amid heightened uncertainty over Europe’s future and also amid the gloomy domestic macro-economic headwinds. In the mid noon trade, the domestic index extended its downfall as rate sensitive’s were weak with the CNX realty, bankex and auto indices edged lower in trades. The RBI in its credit policy review did not make any changes to the repo, reverse repo rates and CRR, which was expected by the street. Although, late noon trade market recovered on buying in FMCG shares and touched the green land recapturing its crucial 5,600 level. But, a sudden down fall witnessed in last half an hour of trade as index heavyweight RIL tumbled by over three percent. Oil minister Jaipal Reddy said on December 15, that the decline in gas output from RIL’s east coast block is due to the company drilling fewer number of wells than promised and stoppage of production at six wells. Finally, Nifty snapped the session with a cut of one and a half percent breaching its crucial 4,550 mark.

On the global front, the US markets ended lower overnight while, Asian markets edged higher as initial concerns about regional tensions after the death of North Korea’s Kim Jong-Il subsided, although European woes continued to cast a pall. However, European counterparts were trading mixed at this point of time. Back home, all the sectoral indices on the NSE hammered badly and settled in the red, CNX PSU Bank remained the major loser, losing 4.04% followed by CNX Infra down 3.60% and CNX Metal down by 3.58% while, CNX FMCG up by 0.31% remained the lone gainer in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, down by 0.16% and reached 30.53.

The India VIX witnessed contraction of 0.16% at 30.53 as compared to its previous close of at 30.58 on Monday.

The 50-share S&P CNX Nifty lost 68.90 points or 1.49% to settle at 4,544.20.

Nifty December 2011 futures closed at 4,566.80 at a premium of 22.60 points over spot closing of 4,544.20, while Nifty January 2011 futures were at 4,585.00 at a premium of 40.80 points over spot closing. The near month December 2011 derivatives contract expires on Thursday, December 29, 2011. Nifty December futures saw addition of 0.26 million (mn) units taking the total outstanding open interest (OI) to 20.44 mn units.

From the most active contract by contract value, SBI’s December 2011 futures were at a discount of 0.85 point at 1581.50 compared with spot closing of 1582.35. The number of contracts traded was 38,633.

L&T December 2011 futures were at a premium of 8.40 point at 979.00 compared with spot closing of 970.60. The number of contracts traded was 24,474.

Axis Bank December 2011 futures were at a discount of 4.00 at 815.00 compared with spot closing of 819.00. The number of contracts traded was 27,188.

RIL December 2011 futures were at a premium of 4.75 points at 716.00 compared with spot closing of 711.25. The number of contracts traded was 26,851.

Infosys December 2011 futures were at a discount of 4.10 point at 2672.00 compared with spot closing of 2676.10. The number of contracts traded was 13,120.

Among Nifty calls, 4600 SP from the December month expiry was the most active call with an addition of 1.25 million or 31.04%.

Among Nifty puts, 4600 SP from the December month expiry was the most active put with a contraction of 0.24 million or 4.39%.

The maximum Call OI outstanding for Calls was at 4600 SP (5.30 mn) and that for Puts was at 4600 SP (5.43 mn).

The respective Support and Resistance levels are: Resistance 4610.58-- Pivot Point 4570.86-- Support 4504.48.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.79 for December -month contract.

The top five scrips with highest PCR on OI were Patni 11.81, Voltas 7.00, BRFL 4.00, ABB 2.75, APIL 2.00 and Cipla 1.58.

Among most active underlying, SBI witnessed an addition of 2.05 million of Open Interest in the December month futures contract followed by Axis Bank which witnessed an addition of 1.26 million of Open Interest in the near month contract. Meanwhile Reliance Industries witnessed an addition of 0.46 million in the December month futures. Also, L&T witnessed an addition of 0.27 million in Open Interest in the December month contract. Finally, ICICI Bank witnessed an addition of 0.18 million of Open Interest in the near month futures contract.