Bears vengeance capitulate Nifty below neutral line

Bears took control on the Dalal street today for the major part of the trade snapping gains of three straight trading session to end today’s trade in red amid lot of volatility. The global cues along with some local jitters restrained the markets to move higher. All the Asian equity indices traded on a mix pack on the back of Europe’s debt-related problems which continued to cast a shadow while financial plays were weighed by disappointing earnings from banking giant Citi. A drop in Shanghai came amid expectation that Beijing won't ease its monetary policy too much. The mainland Chinese stocks declined, giving up some of their previous session’s gains. The European markets too traded on a mix note and the first major test of France's fiscal credibility comes on Thursday, when it attempts to sell between 7.5 and 9.5 billion euros' worth of longer term bonds. However, back home Nifty managed to hold its crucial 4,950 level, led by index heavyweights Reliance Industries.

Domestic benchmark started off the trade with a marginal gap-up opening but the cautiousness prevailed in the markets from the very beginning and after getting a slightly higher start the benchmark indices were dragged down in red, weighed by the plunge in IT sector stocks. Though, the sector major TCS reported a better than expected numbers for the December quarter but the traders took a cautious approach anticipating slowdown due to economic turmoil in Europe and the United States. At the same time, Reliance Industries surged on reports that the company will consider a share buyback on Friday during its December quarter result announcements, which underpinned the positive sentiments in the stock, giving the much needed support and preventing the downside for the benchmarks. Some buying was also seen in the high beta realty sector that too supported the markets from slipping further and market did manage to enter in green. However, World Bank’s weak forecast for the global economy and Finance Minister Pranab Mukherjee's statement that India will struggle to meet the fiscal deficit target of 4.6% for the fiscal year ending March 2012 appeared weighing on the sentiment to a notable extent, which made the key benchmark drift in negative terrain. Later on the power sector stocks were seen buzzing ahead of a meet of top brass of India’s power companies with the prime minister and top minister to talk about the government facilitating easier supply of fuel, coal, and natural gas. Besides non sectoral gauges that kept its gains intact was shares of aviation companies like Jet Airways, Kingfisher and SpiceJet, which rallied after the government opined that it was considering allowing foreign carriers to take 49 percent stake in Indian airlines. However, the main action among the frontline was captured by RIL which climbed higher by more than 4% helping to prevent further downside but consistent selling across the board marked the session in red.

On the global front, the US markets closed higher on Tuesday, as investors welcomed several signs of improving global economic growth while, the Asian markets closed on a mixed note on Wednesday as euro zone fears continued to cast a shadow and China Securities Journal stated that the government may take steps to bolster long-term investor shareholdings. Further, Greece could default as government’s talks with creditors stalled ahead of a March 20 bond payment of 14.5 billion euro, or $18 billion. Investors seemed to be shifting their focus to Portugal’s debt auction and talks in Greece on its debt restructuring. Moreover, major European counterparts were trading on a mixed pack with indices like CAC and FTSE edging lower while DAX was seen trading higher. Back home, broad based selling was witnessed across the sectoral indices barring CNX Energy and CNX Realty on the NSE, which traded to settle in positive territory. The CNX IT was the top loser on sectoral front which ended with a loss of 2.14% followed by CNX Metal down by 1.94% and CNX Infra down 1.35% while, CNX Energy was up by 2.57% and CNX Realty up 0.77% were the only gainer on the NSE sectoral indices. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, gained 0.30% and reached 22.68.

The India VIX witnessed addition of 0.31% at 22.68 as compared to its previous close of at 22.61 on Tuesday.

The 50-share S&P CNX Nifty lost 11.50 points or 0.23% to settle at 4,955.80.

Nifty January 2012 futures closed at 4,957.50 at a premium of 1.70 points over spot closing of 4,955.80, while Nifty February 2012 futures were at 4,980.65 at a premium of 24.85 points over spot closing. The near month January 2012 derivatives contract expires on Thursday, January 25, 2012. Nifty January futures saw contraction of 1.39 million (mn) units taking the total outstanding open interest (OI) to 21.07 mn units.

From the most active contract by contract value, RIL January 2012 futures were at a premium of 6.40 point at 780.05 compared with spot closing of 773.65. The number of contracts traded was 49,411.

SBI’s January 2012 futures were at a premium of 1.55 point at 1866.40 compared with spot closing of 1864.85. The number of contracts traded was 36,014.

TCS January 2012 futures were at a premium of 4.95 points at 1077.95 compared with spot closing of 1073.00. The number of contracts traded was 27,972.

Tata Motors January 2012 futures were at a premium of 1.00 point at 214.10 compared with spot closing of 213.10. The number of contracts traded was 15,995.

L&T January 2012 futures were at a premium of 4.10 point at 1242.10 compared with spot closing of 1238.00. The number of contracts traded was 19,096.

Among Nifty calls, 5100 SP from the January month expiry was the most active call with an addition of 0.67 million open interest.

Among Nifty puts, 4700 SP from the January month expiry was the most active put with an addition of 0.50 million open interest.

The maximum OI outstanding for Calls was at 5100 SP (7.40 mn) and that for Puts was at 4700 SP (7.88 mn).

The respective Support and Resistance levels are: Resistance 4980.61 -- Pivot Point 4955.83 -- Support 4931.01.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.62 for January -month contract.

The top five scrips with highest PCR on OI were JSW Energy 8.60, Union Bank 8.00, MAX 7.33, CESC 7.14 and Vidocon Industries 6.50.

Among most active underlying, Reliance Industries witnessed contraction of 1.84 million of Open Interest in the January month futures contract followed by TCS which witnessed an addition of 0.08 million of Open Interest in the near month contract. Meanwhile SBI witnessed an addition of 0.11 million in the January month futures. Also, Infosys witnessed contraction of 0.21 million in Open Interest in the January month contract. Finally, ICICI Bank witnessed contraction of 0.60 million of Open Interest in the near month futures contract.