Bloodbath resumes after a day of halt; Nifty breaches 5,200 mark

Bloodbath resumed after a day of halt, as bears struck back with a bang on Monday and Nifty snapped the day’s trade with a fall of about 100 points breaching its crucial 5,200 level as traders turned bearish on concerns that the Reserve Bank of India (RBI) may not cut interest rates in view of high international crude oil prices. Globally, Asian counters ended mostly in the red as sentiments in the region remained dampened on lingering concerns about the Chinese economy, cancelling out a positive lead from Wall Street and bargain hunting. However, European markets were trading positively at this point of time. Back home, fall in Indian rupee against the US dollar is set to increase subsidy burden if fuel prices are not hiked and that will also impact the sentiments adversely. The Indian rupee fell to 51.44 per dollar against previous close of 51.17 on demand for dollars from oil importers and a sharp fall in equities.

Key benchmark edged lower in early trade on mostly lower Asian shares. The market extended its initial losses to hit its lowest level in more than two and a half weeks in morning trade breaching its crucial 5,250 mark. Moreover, traders started offloading their position ahead of the expiry of March month’s F&O series on Thursday, March 29, 2012. Market continued its southward journey in the morning trade as rate sensitive counters like Banking and Realty continued to damage the sentiments after they got butchered badly as market participants remained worried over the nation’s fiscal deficit target. In the early noon trade, market breached its crucial 5,200 mark as selling pressure intensified. Meanwhile, shares of Reliance Industries fell by about 2 percent on concerns about its exploration and production (E&P) business, primarily due to continued regulatory uncertainty over the development of its KG-D6 block. Output from KG-D6 has been declining for more than a year, resulting in a sharp fall in India's gas output and forcing the country to resort to increased imports of expensive liquefied natural gas (LNG). After that, weakness persisted in the noon trade as positive opening in European counters too failed to give any support to the domestic benchmark and the local index traded near its crucial 5,200 mark till mid afternoon trade. In the final hour of trade market lost some more ground and snapped the trade near its intraday low breaching its crucial 5,200 mark with a cut of about 1.80 percentage point.

Meanwhile, all the sectoral indices on the NSE got hammered badly and settled in the red, CNX Realty remained the major loser, losing 3.59% followed by CNX PSU Bank down 2.62%, Bank Nifty down 2.44%, CNX Energy down by 2.19%  and CNX Metal down by 2.13% in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, zoomed 14.56% and reached 26.74.

The India VIX witnessed an addition of 14.57% at 26.74 as compared to its previous close of at 23.34 on Friday.

The 50-share S&P CNX Nifty lost 93.95 points or 1.78% to settle at 5,184.25.

Nifty March 2012 futures closed at 5,191.30 at a premium of 7.05 points over spot closing of 5,184.25, while Nifty April 2012 futures were at 5,235.40 at a premium of 51.15 points over spot closing. The near month March 2012 derivatives contract expires on Thursday, March 29, 2012. Nifty March futures saw contraction of 1.21 million (mn) units taking the total outstanding open interest (OI) to 21.56 mn units.

From the most active contract, Tata Motors March 2012 futures were at a discount of 0.55 point at 268.50 compared with spot closing of 269.05. The number of contracts traded was 12,532.

DLF March 2012 futures were at a premium of 0.05 point at 189.30 compared with spot closing of 189.25. The number of contracts traded was 18,589.

HDIL March 2012 futures were at a premium of 0.25 at 89.00 compared with spot closing of 88.75. The number of contracts traded was 15,132.

Reliance Industries March 2012 futures were at a premium of 3.20 point at 731.85 compared with spot closing of 728.65. The number of contracts traded was 18,894.

Tata Steel March 2012 futures were at a discount of 0.25 point at 439.75 compared with spot closing of 440.00. The number of contracts traded was 17,093.

Among Nifty calls, 5400 SP from the March month expiry was the most active call with an addition  of 0.53 million open interest.

Among Nifty puts, 5100 SP from the March month expiry was the most active put with an addition of 1.85 million open interest.

The maximum OI outstanding for Calls was at 5400 SP (6.87mn) and that for Puts was at 5100 SP (9.21mn).

The respective Support and Resistance levels are: Resistance 5247.83-- Pivot Point 5211.36 -- Support 5147.78.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.001 for March -month contract.

The top five scrips with highest PCR on OI were BEML 12.75, IOB 9.00, JP power 5.83 and GE Ship 4.67 and GMDC 4.00.

Among most active underlying, Suzlon witnessed contraction of 14.16 million of Open Interest in the March month futures contract followed by IFCI which witnessed contraction of 5.72 million of Open Interest in the near month contract. Meanwhile, UNITECH witnessed contraction of 4.40 million in the March month futures. Also, JP Associaties Infrastructure witnessed an addition of 1.58 million in Open Interest in the March month contract. Finally, RCOM witnessed contraction of 2.86 million of Open Interest in the near month futures contract.