After witnessing a bloodbath in the previous session and a gap down opening today, CNX Nifty, bounced back from low levels paring most of its losses during the second half and ended the day with a marginal cut of about nine points from its previous close. After making a gap down start, Nifty slipped and breached its crucial 7,500 mark in early deals. The index failed to recover a few times in first half on weak global cues, worse-than-expected inflation numbers announced today, rupee depreciating beyond 60 levels and a rise in oil prices. Funds and retail investors indulged in profit-booking due to weak global cues amid fears over the escalating crisis in Iraq. Banking stocks witnessed beating after higher headline inflation data dampened the chances of RBI slashing key policy rates in its monetary policy in August. However, a final hour recovery helped the index to trim losses and end the session with a marginal cut of nine points. The recovery in the index was due to surge in oil marketing companies (OMCs) which helped revive the sentiments. Healthy buying was observed in Realty, IT and Healthcare counters, while selling pressure was seen in Capital Goods, Auto and Banking counters. Shares of all three listed state-owned OMCs, erasing their entire early morning losses, bounced back after the government announced under-recovery on high-speed diesel to decline further to Rs 1.62 per litre from Rs 2.80 per litre earlier. Moreover, buying activity was seen in defensives such as technology and pharmaceuticals after rupee fell below 60 per dollar.
In near term, the market may incur more losses as crude oil prices are rising in global markets on escalating tensions in Iraq further dampened hopes of a rate cut by the RBI as WPI inflation in May rose to 5-month highs. Looking at the index option data for June series maximum call OI is seen at 7700, followed by 7800 strike prices whereas maximum put OI is at 7500 & 7300 strike prices suggesting broader range is likely in between 7300-7800 levels. The 7500, 7600 and 7700 Call strikes have seen addition of 3.90, 6.45 and 2.15 lakh shares, respectively. On the Put side, 7400 and 7300 strikes have seen reduction of 6.10 and 1.52 lakh shares, respectively.Meanwhile, India VIX - the gauge of underlying volatility in the market - has risen in today's session as traders turned cautious after the benchmark breached psychological level of 7550. The top gainers from the F&O Securities were Dish TV India, Reliance Capital and GAIL. The top losers were Oriental Bank of Commerce, Federal Bank and Mahindra & Mahindra.
Most of the sectoral indices on the NSE were settled in the red, CNX Auto declined by 1.04%, CNX PSU Bank down by 0.69%, CNX Finance down 0.67%, Bank Nifty down by 0.51%, CNX Energy down by 0.10% and CNX Media down by 0.02% remained the top loser in the trade, while CNX IT up by 1.39%, CNX Realty up by 1.26%, CNX FMCG up by 0.56% CNX Pharma up by 0.46% and CNX Metal up by 0.04% was remained the gainers in the trade.
The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 1.24% and reached 17.98. The 50-share CNX Nifty decreased by 8.55 points or 0.11% to settle at 7,533.55. Nifty June 2014 futures closed at 7559.20 on Monday at a premium of 25.65 points over spot closing of 7,533.55, while Nifty July 2014 futures ended at 7594.00 at a premium of 60.45 points over spot closing. Nifty June futures saw contraction of 0.17 million (mn) units, taking the total outstanding open interest (OI) to 14.95 mn units. The near month June 2014 derivatives contract will expire on June 26, 2014.
From the most active contracts, DLF June 2014 futures traded at a premium of 1.50 points at 211.35 compared with spot closing of 209.85. The number of contracts traded were 19,648.
Reliance Industries June 2014 futures were at a premium of 5.55 points at 1070.50 compared with spot closing of 1064.95. The number of contracts traded were 22,487.
Tata Steel June 2014 futures were at a premium of 3.95 points at 527.45 compared with spot closing of 523.50. The number of contracts traded were 20,528.
Yes Bank June 2014 futures were at a premium of 1.30 points at 537.70 compared with spot closing of 536.40. The number of contracts traded were 15,364.
ICICI Bank June 2014 futures traded at a premium of 5.30 points at 1420.60 compared with spot closing of 1415.30. The number of contracts traded were 24,646.Among Nifty calls, 7,600 SP from the June month expiry was the most active call with an addition of 0.64 million open interest. Among Nifty puts, 7,500 SP from the June month expiry was the most active put with contraction of 0.05 million open interest. The maximum OI outstanding for Calls was at 7700 SP (5.74 mn) and that for Puts was at 7,500 SP (5.32 mn). The respective Support and Resistance levels of Nifty are: Resistance 7558.92 --- Pivot Point 7523.23 --- Support --- 7497.87.
The Nifty Put Call Ratio (PCR) finally stood at 0.95 for June month contract. The top five scrips with highest PCR on OI were Mcleod Russel India (1.46), Aurobindo Pharma (1.13), TCS (1.03), Maruti Suzuki (0.94) and BPCL (0.82).
Among most active underlying, State Bank of India witnessed an addition of 0.10 million of Open Interest in the June month futures contract, followed by Tata Steel witnessing an addition of 1.97 million of Open Interest in the June month contract; while Reliance Capital witnessed an addition of 0.60 million of Open Interest in the June month futures contract, Infosys witnessed an addition 0.08 million of Open Interest in the June month contract and Jaiprakash Associates witnessed contraction of 3.22 million of Open Interest in the June month's future contract.
