Domestic index S&P CNX Nifty continued its southbound journey and snapped the day’s trade below its psychological support level of 5,250 on Tuesday as the Samajwadi Party crossed the half-way mark in the 2012 Uttar Pradesh Assembly Elections and looks all set to form the next government in the state without support from Congress or any other party. Moreover, global cues too remained subdued as Asian equity indices continued to witness choppy trade while, European shares fell in early deals as fresh concerns about economic growth in Europe and China, the world’s biggest metals consumer, prompted investors to scale back their risk exposure.
Earlier, after opening with losses, the benchmark Nifty recovered and was up about 100 points in mid-morning session and touched its intraday high recapturing its crucial 5,350 level on renewed buying in a volatile market as investors tracked election results in five states, especially Uttar Pradesh. But, market started falling from that level as market participants grew increasingly worried that the ideal outcome of Samajwadi Party (SP) - Congress alliance in Uttar Pradesh assembly elections is mostly unlikely since the SP emerged as the single largest party in the state, falling short of a clear majority. Meanwhile, metal shares remained under pressure on the bourses after LMEX, a gauge of six metals traded on the London Metal Exchange (LME) slipped 1.37% on Monday, on concerns that slower growth target in China may curb demand from the world’s biggest consumer of the industrial metals. Afterwards, market continued its downfall and Nifty turned red in the mid noon trade as European counters too opened with a huge cut on growth concern. After that, the index extended its losses breaching its crucial 5,250 level in late trade to hit their lowest level in almost five weeks after a setback to the Congress party in assembly elections clouded the UPA government’s ability to push economic reforms. Finally Nifty ended the day’s trade with a cut of over a percentage point. Meanwhile, most of the sectoral indices on the NSE were settled in the red, CNX Metal remained the major loser, down 4.08% followed by CNX Infra down 2.55% and CNX Energy down by 1.92% while CNX FMCG and CNX IT surged 0.77% and 0.62% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 5.46% and reached 27.34.
The India VIX witnessed contraction of 5.46% at 27.34 as compared to its previous close of at 28.92 on Monday.
The 50-share S&P CNX Nifty lost 57.95 points or 1.10% to settle at 5222.40
Nifty March 2012 futures closed at 5,250.40 at a premium of 28.00 points over spot closing of 5,222.40, while Nifty April 2012 futures were at 5,289.80 at a premium of 67.40 points over spot closing. The near month March 2012 derivatives contract expires on Thursday, March 29, 2012. Nifty March futures saw an addition of 0.88 million (mn) units taking the total outstanding open interest (OI) to 25.81 mn units.
From the most active contract, DLF March 2012 futures were at discount of 0.05 point at 197.45 compared with spot closing of 197.50. The number of contracts traded was 24,276.
Reliance Power March 2012 futures were at a premium of 1.05 point at 126.25 compared with spot closing of 125.20. The number of contracts traded was 17,864.
Tata Steel March 2012 futures were at a premium of 3.00 at 426.30 compared with spot closing of 423.30. The number of contracts traded was 23,989.
HDIL March 2012 futures were at a premium of 0.55 point at 101.15 compared with spot closing of 100.60. The number of contracts traded was 20,657.
Reliance Industries March 2012 futures were at a premium of 8.20 point at 783.65 compared with spot closing of 775.45. The number of contracts traded was 20,580.
Among Nifty calls, 5600 SP from the March month expiry was the most active call with an addition of 0.15 million open interest.
Among Nifty puts, 5200 SP from the March month expiry was the most active put with contraction of 0.44 million open interest.
The maximum OI outstanding for Calls was at 5600 SP (4.92mn) and that for Puts was at 5200 SP (7.53 mn).
The respective Support and Resistance levels are: Resistance 5334.16 -- Pivot Point 5270.28 -- Support 5158.51.
The Nifty Put Call Ratio (PCR) OI wise stood at 1.24 for March -month contract.
The top five scrips with highest PCR on OI were ABGSHIP 8.90, JP POWER 5.80, SCI 2.05, MARUTI 2.00, and CANBK 2.00
Among most active underlying, Suzlon witnessed an addition of 0.78 million of Open Interest in the March month futures contract followed by IFCI which witnessed contraction of 0.19 million of Open Interest in the near month contract. Meanwhile, LITL witnessed an addition of 1.17 million in the March month futures. Also, RCOM witnessed contraction of 0.21 million in Open Interest in the March month contract. Finally, UNITECH witnessed an addition of 1.50 million of Open Interest in the near month futures contract.
