Bears struck back with a bang on Thursday and Nifty snapped its four days winning streak witnessing bloodbath throughout the session, a day ahead of the Union Budget 2012-13, after the Reserve Bank of India (RBI) maintained status quo in its monetary policy review and left rates unchanged, citing inflation is still above the comfort level. Moreover, sentiments turned choppy in the Asian region after two days rally and most of the Asian equity indices ended the session in the negative territory on Thursday on concerns that China would retain property-market curbs this year, unsettled investors. Meanwhile, the government pegged inflation to be at 6.5-7 percent by Match 2012 in the economic survey conducted today. FY12 industrial growth has been pegged at 4-5 percent while the same for 2013 is at 7.6 percent.
The market opened in negative terrain breaching its crucial 5,450 mark as investors remained cautious eying RBI monetary policy review aimed weak Asian cues. In the mid morning trade, market witnessed a steep fall of about 60 points in late morning session dragged by rate sensitive sectors such as real estate and banking, which slipped over 2.5 percent each after the RBI kept key policy rates unchanged in its mid-quarter policy review today. The cash reserve ratio (CRR) of scheduled banks were kept unchanged at 4.75 percent of their net demand and time liabilities while the policy repo rate under the liquidity adjustment facility (LAF) is at unchanged at 8.5 percent. RBI further said that risks to inflation have increased due to higher crude prices, the large fiscal deficit and a weakening local currency. The selling intensified in early noon trade and market breached its crucial 5,400 mark after the government tabled the economic survey in parliament and failed to give any significant upside triggers. Meanwhile, Anil Dhirubhai Ambani group’s stocks - Reliance Communications and Reliance Power tanked over 4.5 percent and 2 percent respectively. The National Stock Exchange yesterday said it would remove these stocks from Nifty 50 and would add Asian Paints and Bank of Baroda. Moreover, Railway stocks remained under pressure since Railway Budget announcement. Kalindee Rail Nirman, Texmaco, Texmaco Rail and Kernex Microsystems crashed 5-9 percent. Besides, firm European counters failed to aid Indian equity markets and the index extended its downfall a little in late trade to hit its intraday low. Besides, the initial list of fourth quarter advance tax payment too proved a non-event for the market as top corporate reported a marginal growth, with banking and financial institutions leading the pack. Finally Nifty ended the day’s trade with a huge cut of over one and a half percent below its crucial 5,400 mark.
Meanwhile, most of the sectoral indices on the NSE settled in the negative territory with CNX Realty losing the most, ending with a cut of 2.89% followed by CNX PSU Bank down by 2.83% and Bank Nifty down by 2.71% while, CNX IT marginally up 0.06% remained the lone gainer on NSE sectoral space. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, rose 2.83% and reached 25.42.
The India VIX witnessed an addition of 0.70% at 25.42 as compared to its previous close of at 24.72 on Wednesday.
The 50-share S&P CNX Nifty lost 83.40 points or 1.53% to settle at 5380.50.
Nifty March 2012 futures closed at 5,419.10 at a premium of 38.60 points over spot closing of 5,380.50, while Nifty April 2012 futures were at 5,460.25 at a premium of 79.75 points over spot closing. The near month March 2012 derivatives contract expires on Thursday, March 29, 2012. Nifty March futures saw an addition of 0.61 million (mn) units taking the total outstanding open interest (OI) to 26.38 mn units.
From the most active contract, Tata Motors March 2012 futures were at a premium of 0.40 point at 290.40 compared with spot closing of 290.00. The number of contracts traded was 14,576.
DLF March 2012 futures were at a premium of 1.75 point at 197.05 compared with spot closing of 195.30. The number of contracts traded was 14,253.
HDIL March 2012 futures were at a premium of 0.75 at 105.50 compared with spot closing of 104.75. The number of contracts traded was 12,079.
Tata Steel March 2012 futures were at a premium of 1.20 point at 463.25 compared with spot closing of 462.05. The number of contracts traded was 14,923.
Reliance Industries March 2012 futures were at a premium of 8.10 point at 803.10 compared with spot closing of 795.00. The number of contracts traded was 16,627.
Among Nifty calls, 5600 SP from the March month expiry was the most active call with an addition of 0.55 million open interest.
Among Nifty puts, 5200 SP from the March month expiry was the most active put with contraction of 0.46 million open interest.
The maximum OI outstanding for Calls was at 5600 SP (6.15mn) and that for Puts was at 5200 SP (8.58mn).
The respective Support and Resistance levels are: Resistance 5441.23-- Pivot Point 5401.76 -- Support 5341.03
The Nifty Put Call Ratio (PCR) OI wise stood at 1.17 for March -month contract.
The top five scrips with highest PCR on OI were ABG Ship 8.90, DR Reddy 4.00, JP Power 3.93, Maruti 2.13 and Siemems 1.80
Among most active underlying, Suzlon witnessed contraction of 0.41 million of Open Interest in the March month futures contract followed by IFCI which witnessed contraction of 1.40 million of Open Interest in the near month contract. Meanwhile, LITL witnessed an addition of 2.48 million in the March month futures. Also, Tata Motors witnessed contraction of 0.05 million in Open Interest in the March month contract. Finally, RCOM witnessed contraction of 0.18 million of Open Interest in the near month futures contract.
