Nifty ends in the red; holds 4,750 level

Sentiment remained bearish as investors have decided to stay on the sidelines with only few trading sessions left in the year and domestic index S&P CNX Nifty ended the session with cut of over half a percent. The broader indices too have fallen from day’s high, leading to a drop in the market breadth. After trading range bound in first half, the key benchmark index turned choppy in the noon trade as investors turn their attention to the Parliament debate on the proposed new Lokpal Bill and Anna Hazare’s three-day fast. Meanwhile, trading volumes have been tepid of late but could pick up in the run up to the F&O expiry on Thursday.

Earlier, the market made a flat opening as investors booked their previous sessions’ profit amid feeble cues from Asian markets. But, it recovered its lost ground in mid morning trade and kissed 4,800 mark supported by positive news that industrial growth in key infrastructure areas bounced back to 6.8 per cent in November after touching a five-year low of 0.3 per cent in October. Moreover, Reliance Anil Dhirubhai Ambani (ADA) group shares edged higher on report that Kokilaben Ambani -- mother of Mukesh and Anil on December 26, 2011, said that the two brothers do not have any differences between them and that they are together now too aided the sentiments. Afterwards, market unable to hold that level and started falling down as profit booking was witnessed in all high beta and rate sensitives. Meanwhile, the political heat is all set to escalate as the showdown between Team Anna and the Government is likely to continue. Anna Hazare is all set to begin his three-day agitation in Mumbai from the MMRDA ground in BKC, Bandra. The Parliament will also shortly resume the winter session to debate the New Lokpal Bill. It was the final hour of trade, where market witnessed a sharp fall of about 50 points and market breached its crucial 4,750 mark as Reliance Industries reversed its initial gains and ended with a cut of over a percent. Moreover, there was a buzz in whole telecom sector as the Telecom Commission accepted industry regulator TRAI’s recommendations to relax rules for mergers and acquisitions in the sector and allow spectrum-sharing among telcos, though barring RCom all other major companies closed in red. Finally, Nifty snapped the sluggish day of trade with a cut of about 30 points at its crucial 4,750 mark.

On the global front, Asian shares eased on Tuesday as investors squared positions in thin volume before US markets reopen after a long weekend and investors see fresh data that could offer clues about prospects for the world’s largest economy. Meanwhile, Chinese shares ended flat on Tuesday as investors remained cautious ahead of the New Year holiday. However, European counterparts were trading in the positive terrain at this point of time. Back home, all the sectoral indices on the NSE hammered badly and settled in the red, CNX Realty remained the major loser, losing 1.82% followed by CNX Metal down 1.49% and CNX PSU Bank down by 1.39% in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 1.16% and reached 26.29.

The India VIX witnessed contraction of 1.16% at 26.29 as compared to its previous close of at 26.60 on Monday.

The 50-share S&P CNX Nifty lost 28.50 points or 0.60% to settle at 4,750.50.

Nifty December 2011 futures closed at 4,759.00 at a premium of 8.50 points over spot closing of 4,750.50, while Nifty January 2011 futures were at 4,776.15 at a premium of 25.65 points over spot closing. The near month December 2011 derivatives contract expires on Thursday, December 29, 2011. Nifty December futures saw addition of 1.38 million (mn) units taking the total outstanding open interest (OI) to 16.58 mn units.

From the most active contract by contract value, SBI’s December 2011 futures were at a premium of 0.10 point at 1642.95 compared with spot closing of 1642.85. The number of contracts traded was 23,088.

RIL December 2011 futures were at a premium of 1.55 point at 756.05 compared with spot closing of 754.50. The number of contracts traded was 20,209.

L&T December 2011 futures were at a premium of 0.10 point at 1030.60 compared with spot closing of 1030.50. The number of contracts traded was 13,374.

Infosys December futures were at a premium of 3.00 points at 2754.00 compared with spot closing of 2751.00. The number of contracts traded was 8,181.

ICICI Bank December 2011 futures were at a discount of 0.50 point at 723.50 compared with spot closing of 724.00. The number of contracts traded was 14,765.

Among Nifty calls, 4800 SP from the December month expiry was the most active call with an addition of 0.58 million.

Among Nifty puts, 4700 SP from the December month expiry was the most active put with a contraction of 0.10 million.

The maximum Call OI outstanding for Calls was at 4800 SP (7.14 mn) and that for Puts was at 4700 SP (6.54 mn).

The respective Support and Resistance levels are: Resistance 4792.78 -- Pivot Point 4758.21 -- Support 4715.93.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.91 for December -month contract.

The top five scrips with highest PCR on OI were Patni 11.75, Godrej Industries 9.80, Indian Hotel 6.50, Rolta 5.45, Neyveli Lignite 4.00 and CESC 3.50.

Among most active underlying, SBI witnessed an addition of 0.05 million of Open Interest in the December month futures contract followed by Reliance Industries which witnessed an addition of 0.44 million of Open Interest in the near month contract. Meanwhile Tata Steel witnessed an addition of 0.56 million in the December month futures. Also, ICICI Bank witnessed an addition of 0.38 million in Open Interest in the December month contract. Finally, L&T witnessed a contraction of 0.12 million of Open Interest in the near month futures contract.