Looming global leads drag market lower; Nifty breaches 5,250 mark

Sentiments continued to remain choppy as Nifty witnessed its biggest daily fall in two weeks on Monday on the back of looming global cues. Asian shares fell after a steep slowdown in US jobs growth, which raised anxieties about the health of the world’s largest economy, prompting investors to curb risk exposure ahead of more US data and earnings as well as figures from China this week. Higher than expected Chinese inflation too dampen the sentiments. Back home, banking stocks hit by fears about slowing deposit growth, while capital good stocks like Larsen & Toubro fell on fears that industrial output data due this week would weaken. Moreover, uncertainty over GAAR issue continued to spook investor’s confidence.

Initially, the market opened on subdued note, way below its crucial 5,300 level, hitting lowest level in nearly 1-1/2 weeks on weak global cues. Afterwards, selling intensified and the local index fought hard to defend its 5,250 mark for most part of the day’s trade. Meantime, the index lost the psychological level many times, led by index heavyweight Reliance Industries, which slipped for the second straight day. Moreover, shares of metal companies remained under the hammer in trades today with many of them having ended lower by 2-5 percent, after data showed a much slower pace in US jobs creation and inflation in China rising faster than expected, dimming the global outlook for copper demand. But, 5,250 mark turned out as a great support level till mid noon trade and the index got its important level back after slipping below 5,250 mark as sentiments supported by Jewellery stocks after the jeweller’s called off their three-week-old strike on assurances from Finance Minister Pranab Mukherjee that the government would consider scrapping a budget proposal to levy an excise duty on unbranded jewellery. But, it was the last leg of trade where market lost its control completely and ended the day’s trade near its intraday low below its crucial 5,250 mark.

Meanwhile, most of the sectoral indices on the NSE settled in the negative territory with CNX Metal losing the most, ending with a cut of 3.45% followed by CNX Media down by 2.64% and CNX PSE down by 2.50% while, CNX Pharma was up by 0.65% remained the lone gainer on NSE sectoral space. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, rose 8.24% and reached 22.33.

The India VIX witnessed an addition of 8.24% at 22.33 as compared to its previous close of at 20.63 on Wednesday.

The 50-share S&P CNX Nifty lost 88.50 points or 1.66% to settle at 5,234.40.

Nifty April 2012 futures closed at 5,253.00 at a premium of 18.60 points over spot closing of 5,234.40, while Nifty May 2012 futures were at 5,287.80 at a premium of 53.40 points over spot closing. The near month April 2012 derivatives contract will expire on Thursday i.e. April 26, 2012. Nifty April futures saw contraction of 0.39 million (mn) units taking the total outstanding open interest (OI) to 17.48 mn units.

From the most active contract, Hindalco Industries April 2012 futures were at a premium of 0.85 point at 126.75 compared with spot closing of 125.90. The number of contracts traded was 6,565.

HDIL April 2012 futures were at a premium of 0.50 point at 85.95 compared with spot closing of 85.45. The number of contracts traded was 6,618.

DLF April 2012 futures were at a premium of 0.35 points at 206.10 compared with spot closing of 205.75. The number of contracts traded was 8,256.

Tata Steel April 2012 futures were at a premium of 2.40 point at 459.20 compared with spot closing of 456.80. The number of contracts traded was 10,925.

Reliance Industries April 2012 futures were at a premium of 2.65 point at 744.65 compared with spot closing of 742.00. The number of contracts traded was 11,136. 

Among Nifty calls, 5600 SP from the April month expiry was the most active call with an addition of 0.21 million open interest.

Among Nifty puts, 5200 SP from the April month expiry was the most active put with contraction of 0.47million open interest.

The maximum OI outstanding for Calls was at 5600 SP (4.78mn) and that for Puts was at 5200 SP (5.31mn).

The respective Support and Resistance levels are: Resistance 5272.2-- Pivot Point 5250.1 -- Support 5212.3

The Nifty Put Call Ratio (PCR) OI wise stood at 1.23 for April -month contract.

The top five scrips with highest PCR on OI were Hindustan Zinc 6.00, ABG Ship 3.94, Siemens 2.20, Grasim 1.50, and Nationalum 1.50

Among most active underlying, Suzlon witnessed an addition of 4.59 million of Open Interest in the April month futures contract followed by IFCI which witnessed an addition of 0.40 million of Open Interest in the near month contract. Meanwhile, RCOM witnessed an addition of 0.32 million in the April month futures. Also, JP Associates Infra witnessed an addition of 0.69 million in Open Interest in the April month contract. Finally, IVRCL Infra witnessed an addition of 2.69 million of Open Interest in the near month futures contract.