Indian market end 2011 on dismal note; Nifty ends below 4,650 mark

Indian market signed off 2011 on dismal note as profit booking in index heavyweight Reliance Industries spooked sentiments in final hour of trade on Friday. However, Nifty traded with decent gains for most part of the day as global cues remained supportive, most of the Asian peers snapped the day’s trade in the green. However, the investors finished the year of trade on a bearish note with the benchmark indices tumbling about 24%.

Earlier, after witnessing three days of continuous down fall Indian benchmark made a strong pull back aided by positive global cues post bullish US housing and employment data. Though, Power Finance Corporation and Rural Electrification Corporation snapped the trade with decent gains on the buzz of launching medium-to-long-term infrastructure bonds in the first week of January to raise Rs 3,000-5,000 crore each. Afterwards, market held its good run and traded in tight band till mid noon trade as sentiments were supported by IT shares like HCL Tech, TCS, Wipro, Infosys and Satyam Computers which edged higher in the trade after positive economic data in the United States as it is the world’s biggest economy and also the biggest market for the Indian software services exporters. Meanwhile, Interest rate sensitive realty, auto and banking stocks too rose in the morning trade after data on Thursday, showed food inflation hit five-year low, which could prompt Reserve Bank of India to cut in interest rates to revive slowing economy. But, it was the final hour of trade where market took U-turn and witnessed a steep fall of about 60 points as profit booking was seen in index heavyweight Reliance Industries while, weak opening in European counters too dampened the sentiments. Finally, Nifty snapped the day’s trade with a cut of about half a percent near its intraday low.

On the global front, the US markets climbed higher overnight while, most of the Asian equity indices signed off the year 2011 on a positive note on Friday following a positive finish for Wall Street, with US employment and housing data hinting at a strengthening domestic economy. Moreover, European counterparts were trading mostly in the red at this point of time. Back home, most of the sectoral indices on the NSE settled in the red, CNX Energy remained the major loser, down 1.27% followed by CNX Realty down 0.94% and CNX Metal down by 0.87% while CNX PSE and CNX Pharma surged 0.72% and 0.59% remained the top gainers in the trade, respectively. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 1.84% and reached 27.11.

The India VIX witnessed addition of 1.84% at 27.11 as compared to its previous close of at 26.62 on Thursday.

The 50-share S&P CNX Nifty lost 21.95 points or 0.47% to settle at 4,624.30.

Nifty January 2012 futures closed at 4,626.00 at a premium of 1.70 points over spot closing of 4,624.30, while Nifty February 2012 futures were at 4,644.00 at a premium of 19.70 points over spot closing. The near month January 2012 derivatives contract expires on Thursday, January 25, 2012. Nifty January futures saw addition of 8.15% or 1.57 million (mn) units taking the total outstanding open interest (OI) to 20.89 mn units.

From the most active contract by contract value, RIL January 2012 futures were at a premium of 5.50 point at 697.70 compared with spot closing of 692.20. The number of contracts traded was 31,957.

SBI’s January 2012 futures were at a discount of 30.05 point at 1593.95 compared with spot closing of 1624.00. The number of contracts traded was 25,535.

L&T January 2012 futures were at a premium of 3.90 points at 999.00 compared with spot closing of 995.10. The number of contracts traded was 13,746.

Tata Motors January 2012 futures were at a premium of 0.85 point at 179.05 compared with spot closing of 178.20. The number of contracts traded was 8,258.

Axis Bank January 2012 futures were at a discount of 13.20 point at 794.00 compared with spot closing of 807.20. The number of contracts traded was 14,479.

Among Nifty calls, 4700 SP from the January month expiry was the most active call with an addition of 39.243% or 1.01 million.

Among Nifty puts, 4600 SP from the January month expiry was the most active put with an addition of 23.59% or 0.70 million.

The maximum Call OI outstanding for Calls was at 4700 SP (3.60 mn) and that for Puts was at 4600 SP (3.71 mn).

The respective Support and Resistance levels are: Resistance 4673.53 -- Pivot Point 4641.21 -- Support 4591.98.The Nifty Put Call Ratio (PCR) OI wise stood at 1.07 for January -month contract.

The top five scrips with highest PCR on OI were Union Bank 5.00, Kotak Bank 2.18, Hero MotoCorp 2.16, WELCORP 2.00 and ACC 1.84.

Among most active underlying, Reliance Industries witnessed an addition of 0.88 million of Open Interest in the January month futures contract followed by SBI which witnessed an addition of 0.19 million of Open Interest in the near month contract. Meanwhile ICICI Bank witnessed an addition of 0.53 million in the January month futures. Also, L&T witnessed an addition of 0.11 million in Open Interest in the January month contract. Finally, Tata Steel witnessed an addition of 0.79 million of Open Interest in the near month futures contract.