Nifty prolongs consolidation for fourth straight session

The fifty stock index -- Nifty -- continued its consolidation mood for fourth consecutive day as buying was seen in fundamentally strong stocks in late trade. The index traded in the red for most part of the day’s trade as investors remained cautious ahead of the third quarter earnings, which are expected to remain muted in a slowing economy and high interest rate regime. But, in the late trade market turned flat from its day’s lows supported by recovery in most of the Asian bourses, while, signs of improvement in the German and US economies helped offset concerns over the prospects for euro zone debt auctions later this week, lifting the single currency and European shares on Monday. Back home, buying in infra, realty and pharma sector too supported Nifty to pare initial losses.

Domestic benchmark extended its downfall after a subdued opening following weakening in Asian counters as sentiments got pressured by resurfacing worries over the European debt crisis which outweighed encouraging US Jobs data. The index breached its crucial 4,700 level as somberness persisted after Prime Minister Manmohan Singh’s comment that the country was going through difficult times has cut the nation's growth rate down to 7% in the current fiscal from 8.5% last year. Meanwhile, Telecom Regulatory Authority of India (TRAI) floated a pre-consultation paper on exit policy for telcos. The regulator on the basis of the inputs is contemplating to issue a consultation paper on exit-policy for the telecom service providers soon; however stocks like Bharti Airtel and Idea edged lower in the trade. But, sentiments got some support from Sugar space as stocks Shree Renuka, Rana Sugars, Balrapur Chini and DCM Shriram remained in jubilant mood after getting a clean chit from competition watchdog CCI from charges of cartelization and price manipulation. Thereafter market started crawling towards its green territory and managed to regain its positive terrain tracking the leads from European counterparts. But, some amount of profit booking in last minutes bounded the index near its neutral line for fourth straight session and Nifty ended the session with a marginal cut.

On the global front, the US markets closed mixed on Friday, though the domestic economic reports remained good but the European jitters once again weighed on the mood of the investors after ratings were cut for one of the country in the region and the borrowing cost increased in other while, Asian stock markets ended the day’s trade mixed on Monday as continued concerns over the outlook for Europe. Moreover, European counterparts were trading mixed at this point of time. Back home, on NSE sectoral space CNX Media losing the most, ending with a cut of 0.48% followed by CNX Energy down by 0.46% and CNX Auto down by 0.45% while, CNX Realty up 1.77% and CNX Pharma up by 0.82% remained top gainers. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 0.11% and reached 25.68.

The India VIX witnessed addition of 0.11% at 25.68 as compared to its previous close of at 25.63 on Saturday.

The 50-share S&P CNX Nifty lost 4.10 points or 0.09% to settle at 4,742.80.

Nifty January 2012 futures closed at 4,751.80 at a premium of 9.00 points over spot closing of 4,742.80, while Nifty February 2012 futures were at 4,772.70 at a premium of 29.90 points over spot closing. The near month January 2012 derivatives contract expires on Thursday, January 25, 2012. Nifty January futures saw contraction of 0.45 million (mn) units taking the total outstanding open interest (OI) to 19.95 mn units.

From the most active contract by contract value, SBI’s January 2012 futures were at a premium of 0.10 point at 1634.70 compared with spot closing of 1634.60. The number of contracts traded was 25,165.

Tata Motors January 2012 futures were at a premium of 0.90 point at 201.20 compared with spot closing of 200.30. The number of contracts traded was 11,956.

Infosys January 2012 futures were at a premium of 13.10 points at 2850.30 compared with spot closing of 2837.20. The number of contracts traded was 10,382.

RIL January 2012 futures were at a premium of 3.15 point at 710.25 compared with spot closing of 707.10. The number of contracts traded was 20,345.

ICICI Bank January 2012 futures were at a discount of 0.35 point at 743.95 compared with spot closing of 744.30. The number of contracts traded was 19,098.

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 0.18 million.

The maximum Call OI outstanding for Calls was at 4800 SP (4.38 mn) and that for Puts was at 4700 SP (5.30 mn).

The respective Support and Resistance levels are: Resistance 4769.18 -- Pivot Point 4732.31 -- Support 4705.93.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.24 for January -month contract.

The top five scrips with highest PCR on OI were MRPL 9.00, Union Bank 6.00, Lupin 4.00, Bank of India 3.00 and Gitanjali 2.62.

Among most active underlying, SBI witnessed an addition of 0.14 million of Open Interest in the January month futures contract followed by Reliance Industries which witnessed an addition of 0.75 million of Open Interest in the near month contract. Meanwhile ICICI Bank witnessed an addition of 0.25 million in the January month futures. Also, Tata Steel witnessed an addition of 0.33 million in Open Interest in the January month contract. Finally, Infosys witnessed an addition of 0.03 million of Open Interest in the near month futures contract.