Late wave of selling drags Nifty lower; Infosys guidance disappoints

Sentiments turned bearish in the final hour of trade and Nifty closed the session near its psychological support levels of 5,200 as profit booking witnessed in dying market hours as the index, which already hurt by disappointing Infosys FY13 guidance, got battered further due to euro-zone worries. Though, stocks across the Asia-pacific region rallied on last trading day of the week following overnight firm trend in US market on optimism from the Euro zone as lower Italian bond yields eased some concerns about the region. Moreover, the investors’ sentiment also got boost from the news that North Korea confirmed the failure of its controversial rocket launch. Back home, IT space tanked over 8 percent after IT bellwether Infosys set a weak forecast in dollar terms for the current year ending March 31, 2013.

Earlier, the domestic benchmark made a weak start and came under pressure on the back of weaker-than-expected annual guidance of the IT bellwether Infosys. Though, the company managed to meet the forecast of Q4 and reported a 27.4% rise in quarterly net profit. But what spooked the markets was an extremely conservative annual guidance of the company of just 8-10 percent of revenue growth much lower than the industry body NASSCOM’s projection of 11-14 percent for the whole IT industry. Market, afterwards, tried to stay moderately higher in the first half of trade led by support from every sector barring software and touched its intraday high reclaiming its crucial 5,300 mark. But, news of sharp increase in borrowings by Spain from ECB in March and China’s slowest GDP growth since the first quarter of 2009 dampened the sentiment quite badly in the second half of trade and market witnessed a steep fall of 90 points breaching its crucial 5,200 mark. Finally, market managed to snap the session over its crucial 5,200 mark but thrashed by over a percent point.

Back home, most of the sectoral indices on the NSE were settled in the red, CNX IT remained the major loser, down 8.84% followed by CNX Service down 2.96% and CNX Realty down by 1.19% while CNX Pharma and CNX Energy surged 1.37% and 0.50% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 4.45% and reached 22.75.

The India VIX witnessed an addition of 4.45% at 22.75 as compared to its previous close of at 21.78 on Thursday.

The 50-share S&P CNX Nifty lost 69.40 points or 1.32% to settle at 5207.45.

Nifty April 2012 futures closed at 5,221.10 at a premium of 13.65 points over spot closing of 5,207.45, while Nifty May 2012 futures were at 5,254.80 at a premium of 47.35 points over spot closing. The near month April 2012 derivatives contract will expire on Thursday i.e. April 26, 2012. Nifty April futures saw an addition of 0.08 million (mn) units taking the total outstanding open interest (OI) to 17.22 mn units.

From the most active contract, Tata Steel April 2012 futures were at a premium of 2.60 point at 450.30 compared with spot closing of 447.70. The number of contracts traded was 15,567.

Reliance Industries April 2012 futures were at a premium of 3.60 point at 752.55 compared with spot closing of 748.95. The number of contracts traded was 21,732.

ICICI Bank April 2012 futures were at a premium of 3.65 points at 866.05 compared with spot closing of 862.40. The number of contracts traded was 25,057.

JSW Steel April 2012 futures were at a premium of 0.95 point at 741.05 compared with spot closing of 740.10. The number of contracts traded was 21,845.

Axis Bank April 2012 futures were at a premium of 3.70 point at 1163.00 compared with spot closing of 1159.30. The number of contracts traded was 16,183. 

Among Nifty calls, 5400 SP from the April month expiry was the most active call with an addition of 1.38 million open interest.

Among Nifty puts, 5200 SP from the April month expiry was the most active put with contraction of 0.28 million open interest.

The maximum OI outstanding for Calls was at 5400 SP (6.72mn) and that for Puts was at 5200 SP (6.43mn).

The respective Support and Resistance levels are: Resistance 5281-- Pivot Point 5233.2 -- Support 5159.65.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.13 for April -month contract.

The top five scrips with highest PCR on OI were ABG Ship 3.71, Apil 3.00, Hindustan Zinc 2.00, Patni 2.00, and Siemens 1.92

Among most active underlying, IFCI witnessed an addition of 0.10 million of Open Interest in the April month futures contract followed by JP Associates Infra  which witnessed an addition of 1.24 million of Open Interest in the near month contract. Meanwhile, RCOM witnessed an addition of 0.53 million in the April month futures. Also, UNITECH witnessed contraction of 1.01 million in Open Interest in the April month contract. Finally, witnessed IVRCL Infra witnessed contraction of 3.14 million of Open Interest in the near month futures contract.