Nifty snaps November F&O series with a drastic cut of 5.55%

The domestic index S&P CNX Nifty finally finished its sluggish run for the March series below its crucial 5,200 level as global cues remained subdued, moreover the index performed choppy throughout the series and closed with a massive cut of about 304.45 points or 5.55 percent as compared to previous two strong series on heavy inflow of foreign money. Confusion over the General Anti-Avoidance Rules, less optimistic Union Budget FY13, rollback of rail fares, weak political situation and less hopes of rate cut in April forced the market to shed gains. Though, today Nifty closed on a flat note with a mild cut of 15 points, showing recovery in late trade after got butchered in morning trade amid weak Asian counters.

On the global front, European stock markets were trading slightly lower on Thursday, as mixed readings of recent economic data prompted investors not to build exposure to equities and instead wait for further release for fresh direction. While, sentiments remained bearish for second straight session in the Asian region and most of the equity indices snapped the day’s trade in the red on Thursday as weak economic data from United States and Britain stoked worries about the global economy health.  Back home, market made a gap-down opening prolonging its previous session’s massacre amid weak global leads. After wards, the index remained in bear-grip for major part of the day as investors off-loaded their pending positions on current month’s expiry in the derivative contracts settlement. In addition, falling rupee ignited fears of inflation on account of costly imports and raised concerns that the RBI may not cut interest rates at next month’s monetary policy meet. In the early noon trade, the selling intensified and market fell below its crucial 5,150 mark following weak opening in European counterparts. Meanwhile, the IT sector led the fall as software exporters worried a weakening trend in overseas markets might hurt their business. Over 80% of the software business comes from the US and European markets while, shares of telecom companies faced selling pressure after a business daily reported that the Department of Telecom is likely to impose a combined penalty of Rs 1,000 crore on Bharti Airtel, Vodafone and Idea Cellular for violating 3G licence norms. But, it was the final hour of trade where market started recovering and pared most of its initial losses recapturing 5,150 mark. Finally, Nifty ended the day’s trade with a marginal cut of about 15 points as recovery was seen in front liners like, HDFC, GAIL, Wipro and JSPL in late trade.

Meanwhile, on the NSE, CNX IT losing the most, ending with a cut of over a percent followed by CNX Infra down by 0.76%, CNX PSU Bank down by 0.70%, while CNX Media up by 2.23%, CNX Auto up by 0.54% and CNX Pharma up by 0.52% in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 2.17% and reached 24.33.

The India VIX witnessed contraction of 2.17% at 24.33 as compared to its previous close of at 24.87 on Thursday.

The 50-share S&P CNX Nifty lost 15.90 points or 0.31% to settle at 5,178.85.

Nifty March 2011 futures closed at 5,177.00 at a discount of 1.85 points over spot closing of 5,178.85, while Nifty April 2011 futures were at 5,232.60 at a premium of 53.75 points over spot closing. The near month March 2012 derivatives contract expired today i.e. March 29, 2012. Nifty March futures saw contraction of 1.03 million (mn) units taking the total outstanding open interest (OI) to 16.62 mn units.

From the most active contract, Reliance Industries April 2011 futures were at a premium of 9.35 point at 734.35 compared with spot closing of 725.00. The number of contracts traded was 26,279.

Tata Steel April 2011 futures were at a premium of 0.60 point at 452.60 compared with spot closing of 452.00. The number of contracts traded was 16,569.

ICICI Bank April 2011 futures were at a discount of 1.85 points at 860.35 compared with spot closing of 862.20. The number of contracts traded was 21,515.

Reliance Industries March 2011 futures were at a discount of 0.35 point at 724.65 compared with spot closing of 725.00. The number of contracts traded was 28,974.

Axis Bank April 2011 futures were at a premium of 4.85 point at 1123.80 compared with spot closing of 1118.95. The number of contracts traded was 14,520.

Among Nifty calls, 5200 SP from the March month expiry was the most active call with an addition of 4.14 million open interest.

Among Nifty puts, 5100 SP from the March month expiry was the most active put with an addition of 5.14 million open interest.

The maximum OI outstanding for Calls was at 5200 SP (8.95mn) and that for Puts was at 5100 SP (14.63mn).

The respective Support and Resistance levels are: Resistance 5203.45-- Pivot Point 5169.70 -- Support 5145.10.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.14 for April -month contract.

The top five scrips with highest PCR on OI were Hindustan Zinc 5.00, ABG Ship 4.00, Jubilant Foodworks 2.63, REC 2.33 and Siemens 2.33.

Among most active underlying, Suzlon witnessed an addition of 14.34 million of Open Interest in the April month futures contract followed by IFCI which witnessed an addition of 13.94 million of Open Interest in the near month contract. Meanwhile, LITL witnessed an addition of 18.86 million in the April month futures. Also, RCOM Infrastructure witnessed an addition of 13.09 million in Open Interest in the April month contract. Finally Unitech witnessed contraction of 9.44 million of Open Interest in the near month futures contract.