It seems that bears are not in mood to give any chance to bulls to take control over market as S&P CNX Nifty continued its downtrend for second consecutive session, as sentiments weighed down by banking stocks on worries that non-performing assets (NPAs) may rise on the back of a slowing economy and Reliance Industries (RIL) on concerns of lower gas output from KG-D6 gas field. Bears took full control over market ahead of the F&O expiry tomorrow with index struggled throughout the day’s trade to hold its crucial 4,700 mark. The movement seen in the market this week was despite absence of global cues as global markets are in a holiday mood for Christmas.
Domestic benchmark made a flat start on the back of weak trend in other Asian markets. It extended losses afterwards in the absence of valuable buying activity by foreign funds as they were in the holiday mood ahead of the year end. Interest rate sensitive banking space extended Tuesday’s losses on fears of increase in bad loans in a slowing economy dampened the sentiments. Afterwards, market traded in the tight range till late noon trade and breached its crucial 4,700 mark, dragged by index heavyweight RIL edged lower by 2 percent. The Asian peers too exhibited gloomy trends after disappointing Japanese industrial production and South Korean manufacturers’ confidence data underscored the fact that the global economic recovery still remains uncertain and fragile. On the domestic front, consistent with the stance of monetary policy and based on the current assessment of prevailing and evolving liquidity conditions, the RBI has decided to purchase government securities worth Rs 12,000 crore in order to inject liquidity in the economy. Moreover, PSU oil marketing companies slipped as oil prices loomed higher. HPCL shed 2.7%, BPCL was down 1.7% and IOC slipped 3% in trades. Crude oil futures traded near six-week high after Iran threatened to block crude transportation through the Strait of Hormuz, sparking oil supply concerns. However, the local index made some recovery in final hours and able to hold back its crucial 4,700 mark. Finally, Nifty snapped the sluggish day of trade with a cut of about half a percentage point.
On the global front, the US markets made a flat closing with Dow Jones Industrial Average remaining slightly lower overnight while, Asian markets continued their downtrend for third consecutive day on Wednesday as unease over the euro zone debt crisis overshadowed a strong rise in consumer confidence in the United States. Moreover, most of the European counterparts were trading in the positive terrain at this point of time. Back home, most of the sectoral indices on the NSE were settled in the red, CNX PSU Bank remained the major loser, down 2.58% followed by Bank Nifty down 1.98% and CNX Metal down by 1.85% while CNX Infra and CNX Pharma surged 0.36% and 0.24% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 1.71% and reached 26.74.
The India VIX witnessed addition of 1.71% at 26.74 as compared to its previous close of at 26.29 on Tuesday.
The 50-share S&P CNX Nifty lost 44.70 points or 0.94% to settle at 4,705.80.
Nifty December 2011 futures closed at 4,704.50 at a discount of 1.30 points over spot closing of 4,705.80, while Nifty January 2011 futures were at 4,725.00 at a premium of 19.20 points over spot closing. The near month December 2011 derivatives contract expires on Thursday, December 29, 2011. Nifty December futures witnessed addition of 1.67 million (mn) units taking the total outstanding open interest (OI) to 14.63 mn units.
From the most active contract by contract value, SBI’s December 2011 futures were at a discount of 2.20 point at 1605.10 compared with spot closing of 1607.30. The number of contracts traded was 30,890.
ICICI Bank December 2011 futures were at a premium of 0.60 point at 697.10 compared with spot closing of 696.50. The number of contracts traded was 24,497.
Axis Bank December 2011 futures were at a discount of 0.80 point at 830.00 compared with spot closing of 830.80. The number of contracts traded was 20,646.
Infosys December futures were flat at 2780.00 compared with spot closing of 2780.00. The number of contracts traded was 11,594.
SBI’s January 2011 futures were at a discount of 16.30 point at 1591.00 compared with spot closing of 1607.30. The number of contracts traded was 18,900.
Among Nifty calls, 4800 SP from the December month expiry was the most active call with an addition of 19.46% or 1.32 million.
Among Nifty puts, 4700 SP from the December month expiry was the most active put with a contraction of 7.47% or 0.46 million.
The maximum Call OI outstanding for Calls was at 4800 SP (8.13 mn) and that for Puts was at 4700 SP (5.77 mn).
The respective Support and Resistance levels are: Resistance 4746.11 -- Pivot Point 4715.88 -- Support 4675.56.
The Nifty Put Call Ratio (PCR) OI wise stood at 0.82 for December -month contract.
The top five scrips with highest PCR on OI were GE Ship 12.50, Patni 11.75, Godrej Industries 8.17, Opto Circuts 4.50 and Neyveli Lignite 4.00.
Among most active underlying, SBI witnessed an addition of 0.57 million of Open Interest in the December month futures contract followed by ICICI Bank which witnessed an addition of 0.33 million of Open Interest in the near month contract. Meanwhile Reliance Industries witnessed a contraction of 0.19 million in the December month futures. Also, Axis Bank witnessed an addition of 0.41 million in Open Interest in the December month contract. Finally, DLF witnessed a contraction of 2.52 million of Open Interest in the near month futures contract.
