Nifty snaps two days winning streak on profit booking

After rising over 3 percent in the previous two sessions, the domestic index S&P CNX Nifty consolidated on Wednesday to end the day’s trade marginally lower, as investors opted to book profits ahead of the third quarter earnings on concerns that earnings would remain muted. However, global cues remained supportive as the US markets surged on the start of a new trading year after a gauge of US manufacturing hit a six-month high while, most of the Asian peers snapped the session in the green.

Earlier, the Indian market made a flat opening and soon dipped into the red on back of selling pressure visible in the auto, realty and consumer durable stocks. Meanwhile, telecom stocks remained under pressure as the telecom department plans to impose penalties totaling Rs 1,594 crore on five mobile phone companies for allegedly understating revenues and hence paying lower revenue share during 2006-07 and 2007-08. Stocks like Bharti Airtel, Idea Cellular and Reliance Communication ended the trade with a cut of 1.5-3 percent. Afterwards, the index extended its losses and breached its crucial 4,750 mark as investors wary about quarterly earnings that begin to roll out from next week. High interest rates and sluggish consumer spending are expected to weigh on the results of many companies, while concerns remain about the impact of the euro zone debt crisis on the global economy. But in the mid noon trade, market regained strength and got its positive terrain back touching its intraday high supported by PSU stocks which edged higher after market regulator Securities and Exchange Board of India (SEBI) allowed companies to buy back their own equity from shareholders. Meanwhile, Service sector activity in India improved in the month of December and the sector grew at the fastest pace since July on the back of strong new business and output growth. But it was the final hour of trade, where index witnessed a sharp fall of about 50 points and touched its intraday low following choppy European trade. Finally, Nifty snapped the sluggish day of trade with a marginal cut of about 15 point.

On the global front, the US markets surged on the start of a new trading year while, sentiment remained bullish in the Asian region and most of the Asian peers ended the trade in the green following a rally in US markets on Tuesday. However, most of the European counterparts were trading in the negative terrain at this point of time. Back home, most of the sectoral indices on the NSE were settled in the red, CNX MNC remained the major loser, down 0.98% followed by CNX Media down 0.96% and CNX Auto down by 0.84% while CNX PSE and Bank Nifty surged 0.90% and 0.82% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 0.95% and reached 26.41.

The India VIX witnessed addition of 0.95% at 26.41 as compared to its previous close of at 26.16 on Tuesday.

The 50-share S&P CNX Nifty lost 15.65 points or 0.33% to settle at 4,749.65.

Nifty January 2012 futures closed at 4,753.00 at a premium of 3.35 points over spot closing of 4,749.65, while Nifty February 2012 futures were at 4,774.00 at a premium of 24.35 points over spot closing. The near month January 2012 derivatives contract expires on Thursday, January 25, 2012. Nifty January futures saw addition of 0.87 million (mn) units taking the total outstanding open interest (OI) to 21.69 mn units.

From the most active contract by contract value, Tata Motors January 2012 futures were at a discount of 0.30 point at 199.70 compared with spot closing of 200.00. The number of contracts traded was 19,423.

SBI’s January 2012 futures were at a discount of 14.50 point at 1680.00 compared with spot closing of 1694.50. The number of contracts traded was 29,641.

ICICI Bank January 2012 futures were at a premium of 1.75 points at 743.30 compared with spot closing of 741.55. The number of contracts traded was 27,708.

RIL January 2012 futures were at a premium of 6.00 point at 720.75 compared with spot closing of 714.75. The number of contracts traded was 24,794.

L&T January 2012 futures were at a premium of 0.90 point at 1069.60 compared with spot closing of 1068.70. The number of contracts traded was 14,475.   

Among Nifty calls, 4800 SP from the January month expiry was the most active call with an addition of 0.42 million.

Among Nifty puts, 4700 SP from the January month expiry was the most active put with an addition of 0.43 million.

The maximum Call OI outstanding for Calls was at 4800 SP (3.72 mn) and that for Puts was at 4700 SP (4.72 mn).

The respective Support and Resistance levels are: Resistance 4778.71 -- Pivot Point 4753.78 -- Support 4724.71.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.21 for January -month contract.

The top five scrips with highest PCR on OI were Lupin 4.00, Hotel Leela 2.00, IndusInd Bank 2.00, CESC 2.00 and Hexaware 2.00.

Among most active underlying, SBI witnessed an addition of 0.04 million of Open Interest in the January month futures contract followed by ICICI Bank which witnessed an addition of 0.58 million of Open Interest in the near month contract. Meanwhile Reliance Industries witnessed an addition of 0.35 million in the January month futures. Also, Tata Motors witnessed an addition of 5.50 million in Open Interest in the January month contract. Finally, Tata Steel witnessed an addition of 0.64 million of Open Interest in the near month futures contract.