Bears struck back with a bang on Thursday and Nifty snapped the day’s trade with a fall of over 130 points breaching its crucial 5,250 level as traders booked profits near resistance levels post previous session’s rally. Reports from global markets remained dampened as China’s manufacturing activity shrank for a fifth straight month in March. The HSBC flash PMI, the earliest indicator of China’s industrial activity, fell to 48.1 in March from February’s four-month high of 49.6, with new orders sinking to a four-month low. Moreover, Germany too disappointed the investors by reporting weaker than expected PMI which came in at 48.10. Back home, rollback of a rail fare hike, Comptroller and Auditor General (CAG) report and weak rupee too spooked the sentiments.
After a flat opening, key benchmark turned a bit soft in early trade on the back of profit booking amid weak Asian markets. Meanwhile, the gold loan companies like Muthoot Finance and Manappuram Finance tumbled after the Reserve Bank of India came out with curbs on the business, restricting loans to 60% of the jewellery value and bar loans against coins and gold biscuits. In the mid morning trade, market got back its positive zone as sentiments got some support from PSU stocks which led the pack supported by the opening of IPO of NBCC, a government entity after a long time. National Buildings Construction Corporation (NBCC) is entering the capital markets with an initial public offer of 1.2 crore equity shares at a price band of Rs 90-106. Afterwards, the leakage of a draft CAG report, which alleges the government of extending undue benefits to commercial entities by giving them 155 coal acreages without auction during 2004-09, butchered the traders’ emotion and market turned in the red once again. Moreover, the sentiments also got dampened after newly appointed Railway minister Mukul Roy rolled back most fare hikes proposed by the earlier minister. But, the serious trouble came in the last leg of trade where the index witnessed a steep fall of about 150 points following weak opening in European counter after German’s Manufacturing PMI fell to four-month low at 48.1 in March. Finally, market snapped the day’s trade with a massive cut of over two and a half percent near its intraday low.
Meanwhile, all the sectoral indices on the NSE hammered badly and settled in the red, CNX Realty remained the major loser, losing 4.34% followed by CNX PSU Bank down 3.55%, CNX Infra down 3.55%, CNX Metal down by 3.44% and Bank Nifty down by 3.33% in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, zoomed 17.95% and reached 24.77.
The India VIX witnessed an addition of 17.95% at 24.77 as compared to its previous close of at 21.00 on Wednesday.
The 50-share S&P CNX Nifty lost 136.50 points or 2.54% to settle at 5228.45.
Nifty March 2012 futures closed at 5,240.05 at a premium of 11.60 points over spot closing of 5,228.45, while Nifty April 2012 futures were at 5,286.60 at a premium of 58.15 points over spot closing. The near month March 2012 derivatives contract expires on Thursday, March 29, 2012. Nifty March futures saw contraction of 0.85 million (mn) units taking the total outstanding open interest (OI) to 24.43 mn units.
From the most active contract, Tata Motors March 2012 futures were at a premium of 0.60 point at 270.75 compared with spot closing of 270.15. The number of contracts traded was 18,941.
DLF March 2012 futures were at a premium of 0.90 point at 193.90 compared with spot closing of 193.00. The number of contracts traded was 14,829.
HDIL March 2012 futures were at a premium of 0.45 at 94.10 compared with spot closing of 93.65. The number of contracts traded was 19,013.
Reliance Industries March 2012 futures were at a premium of 4.10 point at 740.10 compared with spot closing of 736.00. The number of contracts traded was 23,321.
Tata Steel March 2012 futures were at a premium of 2.55 point at 449.95 compared with spot closing of 447.40. The number of contracts traded was 31,936.
Among Nifty calls, 5500 SP from the March month expiry was the most active call with an addition of 0.70 million open interest.
Among Nifty puts, 5000 SP from the March month expiry was the most active put with an addition of 0.69 million open interest.
The maximum OI outstanding for Calls was at 5500 SP (6.84mn) and that for Puts was at 5200 SP (7.32mn).
The respective Support and Resistance levels are: Resistance 5341.05-- Pivot Point 5273.35 -- Support 5160.75.
The Nifty Put Call Ratio (PCR) OI wise stood at 1.01 for March -month contract.
The top five scrips with highest PCR on OI were GE Ship 9.00, IOB 9.00, ABG Ship 8.70 JP Power 5.08, and Dr Reddy 2.53
Among most active underlying, Suzlon witnessed contraction of 6.92 million of Open Interest in the March month futures contract followed by IFCI which witnessed contraction of 3.41 million of Open Interest in the near month contract. Meanwhile, LITL witnessed contraction of 7.29 million in the March month futures. Also, GMR Infrastructure witnessed contraction of 15.35 million in Open Interest in the March month contract. Finally, RCOM witnessed contraction of 0.36 million of Open Interest in the near month futures contract.
