Subdued global cues drag Nifty lower; Realty declines over 3%

Nifty ended the choppy day of trade in the red with a cut of over half a percent on Monday, on the back of weak cues from global equity indices. The US markets declined on Friday on reports that nonfarm payroll rose much lower than expected while, all the Asian counterparts, barring Shanghai composite finished in the red terrain. Earlier, the Indian equity market opened in the red on the back of weak global cues. The sentiments remained somber and investors are eying IT bellwether, Infosys result on Tuesday. However, Metal and mining stocks continued their downfall 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. The benchmark continued its south bound journey in early noon trade after European peers too opened in the negative territory. In the last half an hour of trade, market extended its losses and touched the intraday low near its crucial 5,600 level on weakness in realty, IT and metal sectors but, the index got support at that level and pared some of its losses. Meanwhile, agricultural products stocks remained jubilant during trade on the reports that the Empowered Group of Ministers (EGoM) would be meeting today to consider the crucial Food Security Bill and allowing export of food grains. Socks like LT Foods and Kohinoor Foods snapped the trade with a gain over one and a half percent. Finally, Nifty ended the sluggish day of trade with a cut of over half a percent.

On the global front, the US markets declined on Friday on reports that nonfarm payroll rose much lower than expected, while all the Asian equity indices, barring Chinese Shanghai Composite finished the day’s trade in the negative terrain. Moreover, all the European counterparts were trading in the red where major indices like CAC and DAX suffered cut of over a percent at this point of time. Back home, all the sectoral indices on the NSE settled in the negative territory with CNX Realty losing the most, ending with a cut of over three percent followed by CNX IT down by 1.66%, Bank Nifty down by 1.33% and CNX IT down by 0.92 in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 5.46% and reached 19.69, while S&P Nifty dropped by 44.55 points or 0.79% to close at 5,616.10.

The India VIX witnessed a gain of 5.46% at 19.69 on Monday as compared to its previous close of 18.60 on Friday.  

The 50-share S&P CNX Nifty lost 44.55 points or 0.79% and settled at 5,616.10.

Nifty July 2011 futures closed at 5,620.25, at a premium of 4.15 point over spot closing of 5,616.10, while Nifty August 2011 futures were at 5,637.00 at a premium of 20.90 points over spot closing. The near month July 2011 derivatives contract expires on Thursday, 28 July, 2011. Nifty July futures saw an addition of 5.45% or 1.22 million (mn) units, taking the total outstanding open interest (OI) to 23.67 mn units.

From the most active underlying, SBI’s July 2011 futures closed at a discount of 5.60 points at 2436.90 compared with spot closing of 2442.50. The number of contracts traded was 20,372.

Infosys July 2011 futures were at a premium of 0.65 point at 2927.00 compared with spot closing of 2926.35. The number of contracts traded was 15,757.

Orchid Chemicals July 2011 futures were at a discount of 1.75 points at 246.65 compared with spot closing of 248.40. The number of contracts traded was 12,773.

ICICI Bank July 2011 futures were at a premium of 1.70 at 1055.50 compared with spot closing of 1053.80. The number of contracts traded was 11,568.

L&T July 2011 futures were at a premium of 3.50 at 1834.50 compared with spot closing of 1831.00. The number of contracts traded was 6,130.  Among Nifty calls, 5700 SP from the July month expiry was the most active call with an addition of 1.16 million or 17.66%.Among Nifty puts, 5600 SP from the July month expiry was the most active put with decline of 0.53 million or 8.35%.

The maximum Call OI outstanding for Calls was at 5700 SP (7.70 mn) and that for Puts was at 5600 SP (5.78 mn).

The respective Support and Resistance levels are: Resistance 5645.43-- Pivot Point 5623.56-- Support 5594.23

The Nifty Put Call Ratio (PCR) OI wise stood at 1.19 for July -month contract.

The top five scrips with highest PCR on OI were Sun Pharma 2.79, Voltas 2.00, Adani Power 2.00, Bharat Forge2.00 and Jain Irrigation Systems 1.67.

Among most active underlying, SBI witnessed an addition of 4.34% of Open Interest (OI) in the July month futures contract followed by RIL witnessed an addition of 1.25% of Open Interest (OI) in the near month contract. Meanwhile ICICI Bank witnessed an addition of 1.34% of OI in the July month futures.