Nifty snaps two day’s winning streak on profit booking

After making a decent start, key Indian benchmark -- Nifty -- pared entire initial gains and snapped its two day’s winning streak and ended the volatile day of trade in the red with a cut of about 20 points on Friday on the back of profit booking in final hour of trade. Though, the global cues continued to remain supportive as American jobless claims and consumer confidence were reported better than expected. The government’s count of first-time filings for unemployment benefits last week declined to 3,64,000, the lowest level since April 2008 which lifted hopes that the jobs market may be in a slow recovery.

Earlier, the Indian equity market made a positive start extending gains registered in the past two sessions on continued buying influenced by a firming trend in Asian markets and touched its crucial 4,750 mark. Immediately, the benchmark pared most of initial gains and turned flat in the absence of any major trigger. Cut in the forecast for Indian GDP growth to 6.7% for the current fiscal year ending March from its earlier projection of 7.3% by the brokerage firm CLSA has fogged the picture of Dalal Street to some extent. Citing cyclical deceleration caused by high interest rates, policy inertia and the adverse impact of global headwinds, brokerage CLSA pruned its forecast for Indian GDP growth. Afterwards, market traded in green near its neutral lines till noon trade and regained its strength in the mid noon trade following positive opening in European counters. It was the last leg of trade, where market lost its control and turned red on the back of profit booking in index heavyweights Reliance, Infosys, ICICI Bank and ONGC. Meanwhile, telecom stocks like, Idea Cellular and Bharti Airtel edged lower in the trade as the telecom ministry is likely to tell carriers they won't be allowed to offer 3G services outside their licensed zones through roaming agreements with each other. Finally, Nifty snapped the sluggish day of trade with a cut of over 0.40 percent.

On the global front, the US markets climbed overnight, with the S&P 500 extended for the third day, Asian stock markets ended higher on Friday as signs that the US economic recovery is gathering pace lifted investor sentiment following better-than-expected economic data on Thursday. Moreover, European shares were trading buoyant on back of confidence vote in Italy amidst raft of good macro economic data. Back home, most of the sectoral indices on the NSE settled in the negative territory with CNX PSU Bank losing the most, ending with a cut of about one and half a percent followed by CNX Energy down by 1.08% and Bank Nifty down by 1.05% while, CNX Media up 0.75% and CNX Auto up by 0.35% remained the only gainers on NSE sectoral space. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 2.04% and reached 27.39.

The India VIX witnessed an addition of 2.04% at 27.39 as compared to its previous close of at 26.84 on Thursday.

The 50-share S&P CNX Nifty lost 19.85 points or 0.42% to settle at 4,714.00 .

Nifty December 2011 futures closed at 4,723.50 at a premium of 9.50 points over spot closing of 4,714.00, while Nifty January 2011 futures were at 4,744.00 at a premium of 30.00 points over spot closing. The near month December 2011 derivatives contract expires on Thursday, December 29, 2011. Nifty December futures saw addition of 1.22 million (mn) units taking the total outstanding open interest (OI) to 17.61 mn units.

From the most active contract by contract value, SBI’s December 2011 futures were at a premium of 1.80 point at 1646.80 compared with spot closing of 1645.00. The number of contracts traded were 43,321.

L&T December 2011 futures were at a premium of 3.40 point at 1011.90 compared with spot closing of 1008.50. The number of contracts traded was 25,875.

ICICI Bank December 2011 futures were at a premium of 1.60 point at 722.10 compared with spot closing of 720.50. The number of contracts traded was 27,739.

RIL December 2011 futures were at a premium of 2.50 points at 748.00 compared with spot closing of 745.50. The number of contracts traded was 21,783.

Tata Steel December 2011 futures were at a premium of 1.05 point at 347.55 compared with spot closing of 346.50. The number of contracts traded was 23,090.

Among Nifty calls, 4800 SP from the December month expiry was the most active call with an addition of 1.36 million or 25.13%.

Among Nifty puts, 4700 SP from the December month expiry was the most active put with an addition of 1.20 million or 24.12 %.

The maximum Call OI outstanding for Calls was at 4800 SP (6.78 mn) and that for Puts was at 4700 SP (6.18 mn).

The respective Support and Resistance levels are: Resistance 4753.90 -- Pivot Point 4723.55-- Support 4683.65.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.90 for December -month contract.

The top five scrips with highest PCR on OI were Patni 11.75, Indian Hotels Company 6.00, ABB 4.75, CESC 4.20 and Neyveli Lignite Corporation 4.00.

Among most active underlying, SBI witnessed an addition of 1.16% of Open Interest in the December month futures contract followed by ICICI Bank which witnessed an addition of 12.44% of Open Interest in the near month contract. Meanwhile L&T witnessed an addition of 5.04% in the December month futures. Also, Reliance Industries witnessed an addition of 4.24% Open Interest in the December month contract. Finally, Tata Steel witnessed a contraction of 13.09% Open Interest in the near month futures contract.