Nifty breaches 5,200 mark on penultimate day of F&O expiry

It seems to be a tug of war between bulls and bears as domestic index S&P CNX Nifty ended lower post previous sessions’ rally ahead of March series futures and options (F&O) expiry. The index snapped the day’s trade below its crucial 5,200 mark with a cut of about a percent point. On the global front, both the Asian and European stocks fell after France economy grew less than expected and the Federal Reserve Chairman, Ben S Bernanke, said the US unemployment remains too high. Back home, banking, realty and media stocks were the worst performers with each down by over 1.5 percent. Only FMCG and pharma stocks were each up by over 0.2 per cent.

Earlier, market made a soft opening on the back of profit booking amid weak Asian counters. Moreover, lack of clarity over the general anti-avoidance rule or GAAR continued to weigh on the Street for a third day. Yesterday, Finance Minister Pranab Mukherjee told Parliament that GAAR was aimed at tax evaders, but he did not specify if it would target participatory notes. After touching its crucial 5,200 mark, market pared most of its initial losses in mid morning trade. In the late morning trade, market once again retreat as investors started squaring off hefty positions from the rate sensitive banking and realty space which hammered badly by over one and half a percentage point each. Meanwhile, a report by ICRA showed that power distribution companies suffered losses to the tune of whopping Rs 80,000 crore in current fiscal, excluding the government subsidies. The total book losses are likely to reduce to around Rs 38,000 crore, with the inclusion of subsidies. The sentiments continued to remain choppy during noon trade as European counters opened lower and Nifty breached its psychological 5,200 mark. However, in the last few minute of trade market showed some amount of recovery on the back of short covering, but that was not enough to take market into the positive terrain. Finally, Nifty ended the day’s trade tad below its crucial 5,200 level with a cut of about 50 points.

Back home, most of the sectoral indices on the NSE were settled in the red, CNX PSU Bank remained the major loser, down 1.94% followed by Bank Nifty down 1.86% and CNX Realty down by 1.74% while CNX Pharma and CNX FMCG surged 0.30% and 0.10% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, dipped 0.71% and reached 24.87.

The India VIX witnessed contraction of 0.72% at 24.87 as compared to its previous close of at 25.05 on Tuesday.

The 50-share S&P CNX Nifty lost 48.40 points or 0.92% to settle at 5,194.75.

Nifty March 2012 futures closed at 5,197.40 at a premium of 2.65 points over spot closing of 5,194.75, while Nifty April 2012 futures were at 5,247.15 at a premium of 52.40 points over spot closing. The near month March 2012 derivatives contract expires on Thursday, March 29, 2012. Nifty March futures saw contraction of 1.34 million (mn) units taking the total outstanding open interest (OI) to 17.66 mn units.

From the most active contract, Tata Motors March 2012 futures were at a premium of 0.55 point at 271.50 compared with spot closing of 270.95. The number of contracts traded was 15,921.

Tata Steel April 2012 futures were at a premium of 1.80 point at 457.80 compared with spot closing of 456.00. The number of contracts traded was 22,006.

Reliance Industries April 2012 futures were at a premium of 7.35 point at 734.35 compared with spot closing of 727.00. The number of contracts traded was 16,326.

Reliance Industries March 2012 futures were at a discount of 0.40 point at 726.60 compared with spot closing of 727.00. The number of contracts traded was 21,047.

Tata Steel March 2012 futures were at a discount of 0.25 point at 455.75 compared with spot closing of 456.00. The number of contracts traded was 28,761.

Among Nifty calls, 5300 SP from the March month expiry was the most active call with an addition of 1.38 million open interest.

Among Nifty puts, 5100 SP from the March month expiry was the most active put with an addition of 0.55 million open interest.

The maximum OI outstanding for Calls was at 5300 SP (6.68mn) and that for Puts was at 5100 SP (9.48mn).

The respective Support and Resistance levels are: Resistance 5231-- Pivot Point 5200.3 -- Support 5164.05.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.97 for March -month contract.

The top five scrips with highest PCR on OI were IOB 19.00, GE Ship 4.67, GMDCL TD 4.00, OPTO Circui 4.00 and JP Power 3.27

Among most active underlying, Suzlon witnessed contraction of 19.18 million of Open Interest in the March month futures contract followed by IFCI which witnessed contraction of 11.22 million of Open Interest in the near month contract. Meanwhile, LITL witnessed contraction of 14.90 million in the March month futures. Also, RCOM Infrastructure witnessed contraction of 5.98 million in Open Interest in the March month contract. Finally JP Aassociates witnessed contraction of 6.53 million of Open Interest in the near month futures contract.