Bears hit back with a vengeance; Nifty down 2.26%

Bears struck back with a bang on Monday and Nifty snapped the day’s trade with a fall of over 100 points breaching its crucial 5,100 level as traders booked profits near resistance levels after a sharp recent rally this month. Moreover, global cues too remained unsupportive as the US figures overshadowed hopes that Greece will hammer out a debt reduction deal with its creditors while, France’s CAC, Germany’s DAX and Britain’s FTSE lost 0.5-1.5% ahead of European Union Summit today; even there was no consensus on Greek debt deal, which was supposed to be happened before this summit.

Earlier, domestic market made a gap down start as investors booked their profits recorded in the previous four sessions amid a weak trend in other Asian markets. Moreover, dismal third quarter performance of BHEL on margin front also weighed down the markets sentiment. Power equipment major slumped more than 10% as the company’s operating profit margin (OPM) declined sharply in Q3 FY12. NTPC also declined on poor Q3 results. Markets continue to reel under selling spell with Nifty traded below 5,150 levels most part of the day’s trade as sentiments remained subdued after stocks like NTPC, Indian Bank, Oriental Bank of Commerce reported weak Q3 numbers. Condition got worst and the index breached its crucial 5,100 marks as European markets made an awful opening where main indices like CAC, DAX and FTSE opened with a cut of 0.50-1% ahead of European Union Summit slated to be held today. Meanwhile, a CII survey further underscored the decline in business confidence in the December quarter owing to uncertain global economy, rising interest rates and surging inflation. Finally, Nifty snapped the session with a cut of over two percentage point below its crucial 5,100 mark.

On the global front, the US markets made a mixed closing on Friday while, most of the Asian equity indices slipped on Monday after US growth data came in below expectations. Moreover, all the European counterparts were trading in the negative terrain at this point of time. Back home, all the sectoral indices on the NSE hammered badly and settled in the red, CNX Infra remained the major loser, losing 4.48% followed by CNX Realty down 3.13% and CNX Metal down by 3.01% in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surges 8.11% and reached 23.46.

The India VIX witnessed an addition of 8.11% at Monday as compared to its previous close of at 21.70 on Friday.

The 50-share S&P CNX Nifty declined by 117.40 points or 2.26% to settle at 5,087.30.

Nifty February 2012 futures closed at 5,112.10 at a premium of 24.80 points over spot closing of 5,087.30, while Nifty March 2012 futures were at 5,140.05 at a premium of 52.75 points over spot closing. The near month February 2012 derivatives contract expires on Thursday, February 23, 2012. Nifty February futures saw contraction of 1.88 million (mn) units taking the total outstanding open interest (OI) to 21.56 mn units.

From the most active contract by contract value, DLF February 2012 futures were at a premium of 1.80 point at 206.35 compared with spot closing of 204.55. The number of contracts traded was 14,000.

BHEL February 2012 futures were at a premium of 3.30 point at 245.90 compared with spot closing of 242.60. The number of contracts traded was 15,609.

Tata Steel February 2012 futures were at a premium of 3.30 points at 441.80 compared with spot closing of 438.50. The number of contracts traded was 18,495.

LIC Housing Finance February 2012 futures were at a premium of 1.30 point at 244.65 compared with spot closing of 243.35. The number of contracts traded was 18,893.

RIL February 2012 futures were at a discount of 7.55 point at 801.80 compared with spot closing of 794.25. The number of contracts traded was 19,835.  

Among Nifty calls, 5200 SP from the Feburary month expiry was the most active call with an addition of 0.36 million in open interest.

Among Nifty puts, 5100 SP from the February month expiry was the most active put with addition of 0.27 million in open interest.

The maximum OI outstanding for Calls was at 5200 SP (4.80 mn) and that for Puts was at 5100 SP (3.71 mn).

The respective Support and Resistance levels are: Resistance 5143.4-- Pivot Point 5110.05-- Support 5053.95.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.35 for February-month contract.

The top five scrips with highest PCR on OI were JPPOWER 10.00, Canara Bank 2.67, Patni 2.50, Sun Pharmaceuticals 2.40 and the India Cements 2.00.

Among most active underlying as per Open Interest, Tata Motors witnessed a contraction of 0.62 million for the Open Interest in the February month futures contract followed by Reliance Communication which witnessed a contraction of 0.32% of Open Interest in the near month contract. Meanwhile DLF witnessed an addition of 0.28% for the open interest in the J February month futures. Also, BHEL witnessed an addition of 3.44 million in Open Interest in the February month contract. Finally, Tata Steel witnessed an addition of 0.29 million of Open Interest in the near month futures contract