The fifty stock index -- Nifty -- witnessed massacre on Tuesday and ended with a huge cut of about 90 points on the back of euro-zone debt concern and weak IIP numbers on domestic front. Earlier, the Indian equity market made a gap down start on the back of weak cues from global equity indices. Moreover, IT bellwether Infosys reported a lower than expected result for first quarter which further dampened the traders’ sentiments. The company’s Q1 net profit rose 15.73 percent to Rs 1,722 crore, while its revenue was up 23.16 percent at Rs 7,928 crore. Market continued its southbound journey in the mid morning trade on account of poor index of industrial production (IIP) data for the month of May. IIP in May rose a slower-than-expected 5.6 percent from a year earlier. April’s industrial output growth was revised downwards to 5.8 percent from 6.3 percent while, Cabinet reshuffle did the rest of the damage and spooked sentiments. The cabinet reshuffle saw seven ministers being dropped while eight new faces joined the cabinet. However, Prime Minister Manmohan Singh has left the ‘big four’ Finance, Home, Defence and External Affairs ministry untouched. In the late morning trade, benchmarks witnessed some good move and pared some of its initial losses but, subdued opening in European counterparts, on fears that euro zone debt crisis is spreading to much larger countries like Italy and Spain, weighed on the domestic sentiments and market seen a deep fall from there and touched its intraday low breaching its crucial 5,500 level but, the index got strong support at that level and made a recovery of 25-30 points on short covering witnessed in some selective scrips. Finally, Nifty snapped the sluggish day trade with a cut of over one and a half percent percent.
On the global front, the US markets suffered a sharp plunge on Monday, with all the major indices losing more than a percent while, all the Asian equities finished the day’s trade in the negative terrain on Tuesday as investors remained concerned on euro zone’s debt zone crisis becoming contagion. Moreover, all the European counterparts were trading in the red where major indices viz. CAC, DAX and FTSE were trading with a cut of over 1.50-2 percent at this point of time. Back home, on the sectoral front, all the indices on NSE got hammered, CNX IT remained the major laggard, losing 2.97% followed by CNX Realty down 2.94%, CNX Infra dropped 1.88% and Bank Nifty declined by 1.01%. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 5.78% and reached 20.83, while S&P Nifty closed at 5,526.15 losing 89.95 points or 1.60%.
The India VIX witnessed a gain of 5.78% at 20.83 on Tuesday as compared to its previous close of 19.69 on Monday.
The 50-share S&P CNX Nifty lost 89.95 points or 1.60% and settled at 5,526.15.
Nifty July 2011 futures closed at 5,526.00, at a discount of 0.15 point over spot closing of 5,526.15, while Nifty August 2011 futures were at 5,544.00 at a premium of 17.85 points over spot closing. The near month July 2011 derivatives contract expires on Thursday, 28 July, 2011. Nifty July futures saw an addition of 8.78% or 1.99 million (mn) units, taking the total outstanding open interest (OI) to 24.66 mn units.
From the most active underlying, Infosys July 2011 futures closed at a premium of 12.95 points at 2799.05 compared with spot closing of 2786.10. The number of contracts traded was 38,621.
SBI’s July 2011 futures were at a premium of 10.50 point at 2403.20 compared with spot closing of 2392.70. The number of contracts traded was 25,719.
ICICI Bank July 2011 futures were at a premium of 5.00 at 1046.40 compared with spot closing of 1041.40. The number of contracts traded was 19,734.
L&T July 2011 futures were at a premium of 7.75 at 1776.85 compared with spot closing of 1769.10. The number of contracts traded was 10,167.
Tata Motors July 2011 futures were at a discount of 21.00 at 1004.50 compared with spot closing of 1025.50. The number of contracts traded was 17,035. Among Nifty calls, 5700 SP from the July month expiry was the most active call with an addition of 1.45 million or 28.30%.Among Nifty puts, 5600 SP from the July month expiry was the most active put with decline of 1.30 million or 16.97%.
The maximum Call OI outstanding for Calls was at 5700 SP (6.57mn) and that for Puts was at 5600 SP (8.99 mn).
The respective Support and Resistance levels are: Resistance 5571.95-- Pivot Point 5534.45-- Support 5488.65
The Nifty Put Call Ratio (PCR) OI wise stood at 1.07 for July -month contract.
The top five scrips with highest PCR on OI were Sun Pharmaceuticals 4.50, Punjab National Bank 2.41%, Voltas 2.00, Jain Irrigation Systems 1.67 and Kotak Bank 1.38.
Among most active underlying, SBI witnessed an addition of 3.28% of Open Interest (OI) in the July month futures contract followed by DLF which too witnessed an addition of 14.38% of Open Interest (OI) in the near month contract.
