Dismal IIP drags Nifty below 5,400 mark

The domestic index S&P CNX Nifty snapped its two day’s winning streak and ended the choppy day with a cut of over half a percent on Friday, reversing all of its early gains, after data showed that the country’s industrial output in December slowed sharply and Morgan Stanley cut its allocation for emerging market stocks. Moreover, weakness in European counters too dampened the sentiments as concerns over Greek debt default persisted after finance ministers of the euro zone set more conditions for Greece to secure a second bailout following a deal by Greek leaders on reforms.

The Indian equity market made a soft opening as investors booked their profits recorded in the previous two sessions amid a weak trend in Asian peers. But, the index immediately turned positive and Nifty hit highest level in more than 27 weeks as sentiments was boosted by some good results; ACC hit record high after strong Q4 results. While, Tata Steel gained as the company issued an encouraging future outlook after reporting third quarter net loss after trading hours on February 9, 2012. Afterwards, market gave up all its initial gains and turned red in late morning trade on the back of dismal Indian industrial production (IIP) numbers. India's industrial output grew just 1.8 percent in December, it’s slowest in two months, as sluggish global growth, tight monetary policy from the country’s central bank and government policy paralysis stifles economic growth. Market extended its cut and breached its crucial 4,350 mark following subdued opening in European counters. In the final hour of trade, market recovered a bit and reclaimed its crucial 5,350 level on the back of short covering witnessed in some fundamentally strong stocks. Finally, Nifty snapped the sluggish day of trade with a cut of over half a percentage point.

On the global front, the US markets closed higher for a third day in a row overnight however, all the Asian equity indices barring Shanghai Composite snapped the day’s trade in the negative terrain on last trading day of the week as traders grew nervous over Greece’s chances of avoiding a default after euro-zone chiefs withheld a new bailout. Moreover, data showing a sharp drop in Chinese imports added another layer of caution to markets already confronting a dour earnings season. Moreover, all 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 Pharma remained the major loser, down 0.91% followed by CNX Realty down 0.90% and CNX Energy down by 0.85% while CNX Media and CNX Media surged 1.91% and 0.72% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 2.27% and reached 23.83.

The India VIX witnessed an addition of 2.27% at 23.83 as compared to its previous close of at 23.30 on Thursday.

The 50-share S&P CNX Nifty lost 30.75 points or 0.57% to settle at 5,381.60.

Nifty February 2012 futures closed at 5,397.65 at a premium of 16.05 points over spot closing of 5,381.60, while Nifty March 2012 futures were at 5,427.60 at a premium of 46.00 points over spot closing. The near month February 2012 derivatives contract expires on Thursday, February 23, 2012. Nifty February futures saw contraction of 0.98 million (mn) units taking the total outstanding open interest (OI) to 25.25 mn units.

From the most active contract, IFCI February 2012 futures were at a premium of 0.40 point at 39.20 compared with spot closing of 38.80. The number of contracts traded was 14,195.

Tata Motors February 2012 futures were at a premium of 1.15 point at 258.15 compared with spot closing of 257.00. The number of contracts traded was 14,705.

IDFC February 2012 futures were at a premium of 1.15 point at 134.55 compared with spot closing of 133.40. The number of contracts traded was 12,647.

DLF February 2012 futures were at a premium of 1.55 point at 231.25 compared with spot closing of 229.70. The number of contracts traded was 16,642.

Tata Steel February 2012 futures were at a premium of 1.55 point at 476.85 compared with spot closing of 475.30. The number of contracts traded was 61,482.

Among Nifty calls, 5500 SP from the February month expiry was the most active call with an addition of 0.74 million open interest. 

Among Nifty puts, 5200 SP from the February month expiry was the most active put with an addition of 0.03 million open interest.

The maximum OI outstanding for Calls was at 5500 SP (6.97 mn) and that for Puts was at 5200 SP (6.79 mn).

The respective Support and Resistance levels are: Resistance 5425.88 -- Pivot Point 5383.46 -- Support 5339.18.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.67 for February -month contract.

The top five scrips with highest PCR on OI were Canara Bank 7.67, Godrej Industries 7.11, Patel Engineering 5.67, OnMobile Global 5.33 and United Phosphorus 4.00.

Among most active underlying, Suzlon witnessed contraction of 4.48 million of Open Interest in the February month futures contract followed by IFCI which witnessed an addition of 10.69 million of Open Interest in the near month contract. Meanwhile Unitech witnessed contraction of 1.73 million in the February month futures. Also, JP Associates witnessed contraction of 2.28 million in Open Interest in the February month contract. Finally, Reliance Communications witnessed contraction of 0.08 million of Open Interest in the near month futures contract.