Nifty snaps five day winning streak on low growth estimates

The domestic index S&P CNX Nifty ended lower by about half a percent snapping its five-day's winning streak, as investors booked profits after the government forecast growth may dip below 7 percent, the slowest pace since the 2008 financial crisis. Moreover, investors remained on safer side and kept a wary eye on Greece, where leaders need to secure a new bailout deal to avoid a messy default on its debts. Earlier, the Indian equity market made a gap up start but immediately turned flat due to profit-taking by funds and retail investors in selected stocks amid a mixed trend in the Asian markets. After cooling off from its day’s high, market slowly clinched back towards its crucial psychological level of 5,400 mark, which is also its six month high level. Meanwhile, in its move to improve liquidity situation, RBI opined that repurchase of government securities that have been contracted for sale will be allowed for transaction. The sentiments were also supported by Aviation stocks. Stocks like Spice Jet, Jet Airways and Kingfisher Airlines zoomed on reports that the government panel recommended up to 49 percent foreign direct investment by foreign airlines, direct import of jet fuel by airlines. Afterwards, market found strong resistance near its crucial 5,400 level and started its down trend as CSO sees FY12 growth little lower. The government has come out with a FY12 GDP advance estimates in which FY12 GDP growth estimated at 6.9% versus 8.4%, farm growth seen at 2.5% versus 7%, manufacturing sector growth at 3.9% versus 7.6%, construction growth at 4.8% versus 8%, mining sector growth decline at -2.2% versus 5%, electricity and gas growth estimated at 8.3%. In the final hour of trade the index pared all of its early gains and turned red as European shares fell, after disappointing earnings reports from UBS and Alfa Laval and as Greece remained in danger of failing to secure a new bailout to avoid a chaotic default on its debt. Moreover, Nifty breached its crucial 5,350 level and snapped the trade with a cut of about half a percent.

On the global front, the stocks in the US markets receded on Monday while, Asian stock markets snapped the day’s trade mostly lower on Tuesday as talks dragged on to resolve a massive debt mess in Greece before it explodes into a wider financial crises. Moreover, all the European counterparts were trading in the negative terrain where major indices CAC, DAX and FTSE all were trading with a cut of about half a percent at this point of time. Back home, most of the sectoral indices on the NSE were settled in the red, CNX Infra remained the major loser, down 2.40% followed by CNX Realty down 2.38% and CNX Metal down by 1.59% while Bank Nifty and CNX Energy surged 0.54% and 0.52% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 1.01% and reached 24.91.

The India VIX witnessed an addition of 1.01% at 24.91 as compared to its previous close of at 24.66 on Monday.

The 50-share S&P CNX Nifty lost 26.50 points or 0.49% to settle at 5,335.15.

Nifty February 2012 futures closed at 5,355.20 at a premium of 20.05 points over spot closing of 5,335.15, while Nifty March 2012 futures were at 5,381.45 at a premium of 46.30 points over spot closing. The near month February 2012 derivatives contract expires on Thursday, February 23, 2012. Nifty February futures saw an addition of 1.01 million (mn) units taking the total outstanding open interest (OI) to 25.26 mn units.

From the most active contract by contract value, Tata Motors February 2012 futures were at a premium of 0.55 point at 251.30 compared with spot closing of 250.75. The number of contracts traded was 15,048.

DLF February 2012 futures were at a premium of 0.40 point at 228.40 compared with spot closing of 228.00. The number of contracts traded was 14,961.

Tata Steel February 2012 futures were at a premium of 3.60 point at 453.30 compared with spot closing of 449.70. The number of contracts traded was 24,032.

ICICI Bank February 2012 futures were at a discount of 3.20 point at 936.10 compared with spot closing of 939.30. The number of contracts traded was 22,595.

RIL February 2012 futures were at a premium of 3.90 point at 849.15 compared with spot closing of 845.25. The number of contracts traded was 21,386.

Among Nifty calls, 5400 SP from the February month expiry was the most active call with an addition of 0.47 million open interest. Among Nifty puts, 5200 SP from the February month expiry was the most active put with an addition of 0.13 million open interest.

The maximum OI outstanding for Calls was at 5400 SP (5.88 mn) and that for Puts was at 5200 SP (7.33 mn).

The respective Support and Resistance levels are: Resistance 5391.35 -- Pivot Point 5357.15 -- Support 5300.95.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.72 for February -month contract.

The top five scrips with highest PCR on OI were Canara Bank 6.33, IOB 5.00, Polaris 4.82, Kotak Bank 4.00 and United Phosphorus 3.64.

Among most active underlying, Unitech witnessed an addition of 11.39 million of Open Interest in the February month futures contract followed by IFCI which witnessed contraction of 2.70 million of Open Interest in the near month contract. Meanwhile Tata Motors witnessed an addition of 1.27 million in the February month futures. Also, JP Associates witnessed an addition of 1.49 million in Open Interest in the February month contract. Finally, Reliance Communications witnessed an addition of 1.90 million of Open Interest in the near month futures contract.