Sentiments remained bearish for fourth straight day on Monday and Nifty clobbered out of shape snapping the session with a cut of about 150 points as high global oil prices revived concerns about inflation in the country. Market kept falling throughout the day without showing the sign of recovery at any point of time and Nifty hit a three-week low to fall way below 5,300 level as huge shorts piled up and long positions unwinding took place. Globally, Asian stocks fell after rising oil prices raised concerns that higher energy costs will weigh on economic growth and as yen’s decline boosted the outlook for Japanese exporters. European stocks declined as the G-20 nations rebuffed calls from the euro zone to boost the IMF’s resources. Back home, banking stocks, led by ICICI Bank and SBI, have fallen too on concerns over pricing pressure that might make it difficult for the RBI to ease monetary policy.
The Indian equity market made a positive start but, immediately slipped into the red as participants engaged in profit-booking on the back of macroeconomic worries arising from high oil prices. Afterwards, the index breached its crucial 5,400 mark in morning trade. Meanwhile, Sesa Goa tumbled over 10 percent after Vedanta Resources Plc group on February 25, announced the merger of its Indian subsidiaries. Sesa Goa will absorb Sterlite Industries India in an all-share deal. Investors will get three Sesa Goa shares for five shares of Sterlite. Vedanta will transfer its 38.8% holding in Cairn India, including a debt of $5.9 billion, to the combined entity Sesa Sterlite. The down trend continued in mid morning trade and benchmark breached its crucial 5,350 level as sentiments dampened by Auto and capital goods stocks, which fell on profit taking after recent strong gains. Selling pressure accentuated further in mid-afternoon trade as the key benchmark indices hit their lowest level in nearly 3-1/2 weeks breaching its psychological 5,300 level and ended the day’s trade near its intraday low with a cut of over two and a half percent.
On the global front, the US markets made a flat closing on Friday despite good report of consumer confidence and retail sales while, most of the Asian equity indices ended the day’s trade in the red on Monday as high oil prices dampened investors’ sentiments for riskier stocks ahead of the release of data likely to show that the US economy is improving at a slow but steady clip. Moreover, most of 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 Realty remained the major loser, down 5.49% followed by CNX Metal down 5.05% and CNX PSU Bank down 4.87% while CNX FMCG surged 0.24% remained the lone gainer in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, rose 10.31% and reached 27.38.
The India VIX witnessed an addition of 10.31% at 27.38 as compared to its previous close of at 24.82 on Friday.
The 50-share S&P CNX Nifty lost 148.10 points or 2.73% to settle at 5,281.20.
Nifty March 2012 futures closed at 5,338.60 at a premium of 57.40 points over spot closing of 5,281.20, while Nifty April 2012 futures were at 5,372.25 at a premium of 91.05 points over spot closing. The near month March 2012 derivatives contract expires on Thursday, March 29, 2012. Nifty March futures saw contraction of 0.56 million (mn) units taking the total outstanding open interest (OI) to 24.82 mn units.
From the most active contract, Tata Motors March 2012 futures were at a premium of 2.80 point at 262.15 compared with spot closing of 259.35. The number of contracts traded was 12,325.
Sterlite Industries March 2012 futures were at a premium of 1.20 point at 116.55 compared with spot closing of 115.35. The number of contracts traded was 22,712.
RIL March 2012 futures were at a premium of 13.30 points at 792.30 compared with spot closing of 779.00. The number of contracts traded was 22,298.
HDFC March 2012 futures were at a premium of 3.60 point at 666.70 compared with spot closing of 663.10. The number of contracts traded was 12,821.
Tata Steel March 2012 futures were at a premium of 3.90 point at 446.90 compared with spot closing of 443.00. The number of contracts traded was 19,761.
Among Nifty calls, 5600 SP from the March month expiry was the most active call with an addition of 0.95 million open interest.
Among Nifty puts, 5300 SP from the March month expiry was the most active put with an addition of 0.99 million open interest.
The maximum OI outstanding for Calls was at 5600 SP (3.76 mn) and that for Puts was at 5300 SP (6.39 mn).
The respective Support and Resistance levels are: Resistance 5397.95 -- Pivot Point 5333.05 -- Support 5216.30.
The Nifty Put Call Ratio (PCR) OI wise stood at 1.48 for March -month contract.
The top five scrips with highest PCR on OI were ABG Ship 9.00, SKumar Nationwide 6.50, PNB 2.95, MRPL 2.00 and Tata Chemical 2.00.
Among most active underlying, Suzlon witnessed contraction of 1.86 million of Open Interest in the March month futures contract followed by IFCI which witnessed an addition of 2.09 million of Open Interest in the near month contract. Meanwhile LITL witnessed contraction of 1.80 million in the March month futures. Also, Reliance Communications witnessed an addition of 0.04 million in Open Interest in the March month contract. Finally, Tata Motors witnessed contraction of 0.26 million of Open Interest in the near month futures contract.
