Nifty continues southbound journey for second straight session; down by 0.50%

After witnessing bloodbath in previous session, S&P Nifty continued its southbound journey for second day in a row on Wednesday and snapped the day’s trade with a cut of half a percent as negative global cues and a weakening rupee continued to weigh on the benchmark indices. On the global front, the US markets closed lower overnight while, all the Asian counters shut shop in the negative terrain amid fears that Greece could leave the European Union after the country’s second biggest party said it would rip up a bailout deal following weekend elections. Moreover, European counters too were bleeding badly at this point of time. Back home, the Indian rupee too depreciated by 58 paise to trade near the day's low of 53.70 a dollar. Financial and banking, metals, realty, auto, telecom and oil & gas stocks weighed down on the market.

Initially, market opened in the red amid a subdued trend on global bourses. Trade remained choppy after Reserve Bank of India (RBI) Deputy Governor Subir Gokarn commented that there is little room for further reduction in interest rates in view of inflationary pressure, triggering selling pressure by participants. In the mid morning trade, market recouped from losses and got back its crucial 5,000 mark supported by FMCG space. ITC bucked the weak trend prevailing in markets and rallied over four percent after declining almost 8 percent in last six days, after the government proposed an amendment to the pricing methodology for an excise duty announced in March which would be positive for cigarette manufacturers as it would provide better pricing flexibility and margin upside. In the early noon trade, market again fell into the negative terrain following weak opening in European counters. In the final hour of trade, market once again fell below the psychological levels after regaining it in mid noon session. The selling intensified in the late trade led by index heavyweight Reliance Industries after it cut estimates for proven gas reserves in its domestic blocks, while banks extended recent falls. Finally, Nifty ended the day’s trade in the red with a cut of half percentage point.

Meanwhile, most of the sectoral indices on the NSE were settled in the red, CNX PSU Bank remained the major loser, down 3.52% followed by CNX Realty down 2.87% and CNX Metal down by 2.04% while CNX FMCG and CNX Pharma surged 3.15% and 0.03% respectively remained the only gainers in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 3.97% and reached 23.04.

The India VIX witnessed an addition of 3.97% at 23.04 as compared to its previous close of at 22.16 on Tuesday.

The 50-share S&P CNX Nifty lost 25.15 points or 0.50% to settle at 4974.80.

Nifty May 2012 futures closed at 4983.95 at a premium of 9.15 points over spot closing of 4974.80, while Nifty June 2012 futures were at 5000.40 at a premium of 25.60 points over spot closing. The near month May 2012 derivatives contract will expire on Thursday i.e. May 31, 2012. Nifty May futures saw contraction of 0.32 million (mn) units taking the total outstanding open interest (OI) to 19.91 mn units.

From the most active contract, Tata Motors May 2012 futures were at a premium of 1.85 point at 294.50 compared with spot closing of 292.65. The number of contracts traded was 19,416.

HDIL May 2012 futures were at a premium of 0.60 point at 66.85 compared with spot closing of 66.25. The number of contracts traded was 11,245.

ITC May 2012 futures were at a premium of 1.00 points at 240.90 compared with spot closing of 239.90. The number of contracts traded was 10,121.

DLF May 2012 futures were at a premium of 0.85 point at 182.55 compared with spot closing of 181.70. The number of contracts traded was 10,208.

Tata Steel May 2012 futures were at a premium of 0.75 point at 417.05 compared with spot closing of 416.30. The number of contracts traded was 16,056.

Among Nifty calls, 5200 SP from the May month expiry was the most active call with an addition of 0.36 million open interest.

Among Nifty puts, 5000 SP from the May month expiry was the most active put with contraction of 0.10 million open interest.

The maximum OI outstanding for Calls was at 5200 SP (6.59mn) and that for Puts was at 5000 SP (6.59mn).

The respective Support and Resistance levels are: Resistance 5008.55-- Pivot Point 4982.5-Support 4948.75.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.96 for May -month contract.

The top five scrips with highest PCR on OI were ABG Ship 49.00, Union Bank 3.67, Siemens 2.19, Finan tech 2.00 and MRPL 2.00.

Among the most active underlying, Suzlon witnessed an addition of 0.07 million of Open Interest in the April month futures contract followed by LITL which witnessed an addition of 0.15 million of Open Interest in the near month contract. Meanwhile, IFCI witnessed an addition of 0.36 million in the April month futures. Also, JP Associates Infra witnessed an addition of 1.75 million in Open Interest in the April month contract. Finally, RCOM witnessed contraction of 0.46 million of Open Interest in the near month futures contract.