Last hour profit booking drags Nifty; banking, metal stocks tumble

After yesterday’s terrific rally, Nifty ended the choppy day of trade in the red with a cut of over a percent on Friday on the back of final hour profit booking. Though, the global cues continued to remain supportive as the US markets surged overnight after getting good reports that private employers stepped up hiring in June. Earlier, the Indian equity market too made positive start but slipped into the red on the back of profit booking witnessed in some of the blue-chip companies. The local index continued to decline till late morning trade and breached its crucial 5,700 mark. But, some amount of recovery was witnessed and Nifty gained about 30 points supported by positive opening in European counterparts. Moreover, rally in sugar stocks on report that the government is considering sugar decontrol too aided the sentiments. Stocks viz. Shree Renuka Sugars, EID Parry and Rana Sugars all ended the trade with a gain of over two percent. But, it was the final hours of trade, where the benchmark lost all its control and witnessed a sharp fall as profit booking intensified in metal and banking sector. Meanwhile, mining and metal stocks like Sesa Goa, SAIL, Hindalco and Sterlite Industries tumbled by 3.5-4.5 percent on reports that a panel of ministers has approved the draft Mining Bill, which calls for miners to give to local communities an amount equivalent to royalties so as to compensate people displaced by such projects. Finally, Nifty ended the sluggish day of trade near its intraday low with a cut of over 60 points.

On the global front, the US markets closed higher overnight on getting good jobs and rebound in retail sales reports, while most of the Asian equity indices finished the day’s trade in the positive terrain on last trading day of the week. Moreover, European counterparts were trading on a mixed note at this point of time. Back home, on the sectoral front on the NSE, Bank Nifty remained the major laggard, losing 1.23% followed by CNX IT down 0.94%, CNX Infra 0.71% while, CNX Realty up by 2.39% remained the lone gainer. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, rose 0.26% and reached 18.67, while S&P Nifty closed at 5,660.65 losing 68.30 points or 1.19%.

The India VIX witnessed a gain of 0.26% at 18.67 on Friday as compared to its previous close of 18.62 on Thursday.  

The 50-share S&P CNX Nifty lost 68.30 points or 1.19% and settled at 5,660.65.

Nifty July 2011 futures closed at 5,664.00, at a premium of 3.35 point over spot closing of 5,660.65, while Nifty August 2011 futures were at 5,681.10 at a premium of 20.45 points over spot closing. The near month July 2011 derivatives contract expires on Thursday, 28 July, 2011. Nifty July futures saw an addition of 5.36% or 1.21 million (mn) units, taking the total outstanding open interest (OI) to 23.81 mn units.

From the most active underlying, SBI’s July 2011 futures closed at a premium of 2.10 points at 2482.10 compared with spot closing of 2480.00. The number of contracts traded was 29,263.

ICICI Bank July 2011 futures were at a premium of 5.30 point at 1065.85 compared with spot closing of 1060.55. The number of contracts traded was 17,451.

Tata Steel July 2011 futures were at a premium of 0.60 points at 595.15 compared with spot closing of 594.55. The number of contracts traded was 14,506.

RIL July 2011 futures were at a premium of 4.15 at 858.45 compared with spot closing of 854.30. The number of contracts traded was 19,000.DLF July 2011 futures and spot closing converged and were at 235.00. The number of contracts traded was 17,184. Among Nifty calls, 5700 SP from the July month expiry was the most active call with an addition of 1.70 million or 34.12%.

Among Nifty puts, 5600 SP from the July month expiry was the most active put with an addition of 0.21 million or 6.01.

The maximum Call OI outstanding for Calls was at 5700 SP (6.71 mn) and that for Puts was at 5600 SP (3.75 mn).

The respective Support and Resistance levels are: Resistance 5717.02 -- Pivot Point 5684.03 -- Support 5627.67.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.26 for July -month contract.

The top five scrips with highest PCR on OI were Sun Pharma 3.39, Jain Irrigation Systems 2.50, Adani Power 2.00, Bharat Forge2.00 and Voltas 2.0.

Among most active underlying, SBI witnessed an addition of 1.10% of Open Interest (OI) in the July month futures contract followed by RIL witnessed an addition of 5.72% of Open Interest (OI) in the near month contract. Meanwhile DLF witnessed an addition of 0.29% of OI in the July month futures while ICICI Bank witnessed an addition of 12.92% of OI in the July month futures.