Nifty tumbles ahead of May F&O expiry, Q4 GDP data

Domestic index S&P CNX Nifty snapped its two days winning streak and ended the choppy day of trade with a cut of 0.80 percent on Wednesday as traders chose to play safe and remained on the sidelines ahead of the F&O expiry and fourth quarter (Gross Domestic Numbers) GDP data slated to be released tomorrow. Global cues too remained subdued as most of the Asian equity indices ended in the red on report that Chinese government dashed earlier hopes of introducing fresh stimulus measures to boost its economy while, European counters too were trading with a deep cut as third downgrade of Spain’s credit rating in less than a month by Egan-Jones Ratings prompted investors to take profits off the table. Back home, rupee crumbled for third day and fell below the psychological mark of Rs 56 per dollar. Heavy demand for American dollar and its strength over euro amid concerns regarding euro zone weakened the rupee.

The Indian equity market made a soft opening as investors booked their profits recorded in the previous two sessions amid a weak trend in Asian peers. Meanwhile, sentiments also remained dampened after Tata Motors crumbled about 8 percent in early trade, as the auto maker suffered heavy losses on reports that its Jaguar Land Rover (JLR) unit missed market estimates. However, the company’s consolidated net profit rose to Rs 6,234 crore, from Rs 2,637 crore in the year-ago quarter. Afterwards, selling intensified and Nifty breached its crucial 4,950 mark led by weakness in banking space. Stocks like ICICI Bank, SBI and HDFC Bank declined between 1-3 percent. In the mid morning trade, market recovered some lost ground supported by software stocks, which rose after rupee weakened against the dollar. Market again lost its crucial 4,950 mark following weak opening in European counters in the early noon trade. But, in the mid noon trade market mostly recouped all its losses after DMK chief M Karunanidhi said he never threatened to pull out of the UPA if Centre failed to roll back the petrol price hike. However, the recovery proved to be short lived as market again nosedived in the final hour of trade due to continuous fall in rupee. Finally, market ended the day’s trade with a cut 40 points.

Meanwhile, most of the sectoral indices on the NSE were settled in the red, CNX Auto remained the major loser, down 3.66% followed by CNX Realty down 2.73% and CNX Bank Nifty down by 1.79% while CNX IT and CNX FMCG surged 0.49% and 0.06% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 5.28% and reached 25.30.

The India VIX witnessed an addition of 5.29% at 25.30 as compared to its previous close of at 24.03 on Tuesday.

The 50-share S&P CNX Nifty lost 39.35 by point or 0.79% to settle at 4950.75.

Nifty May 2012 futures closed at 4,933.05 at a discount of 17.70 points over spot closing of 4,950.75, while Nifty June 2012 futures were at 4,932.00 at a discount of 18.75 points over spot closing. The near month May 2012 derivatives contract will expire on Thursday i.e. May 31, 2012. Nifty May futures saw a contraction of 1.64 million (mn) units taking the total outstanding open interest (OI) to 14.64 mn units.

From the most active contract, Tata Motors May 2012 futures were at a premium of 1.75 point at 243.65 compared with spot closing of 241.90. The number of contracts traded was 35,985.

HDIL May 2012 futures were at a premium of 0.25 point at 65.15 compared with spot closing of 64.90. The number of contracts traded was 12,722.

DLF May 2012 futures were at a premium of 0.25 points at 182.75 compared with spot closing of 182.50. The number of contracts traded was 13,343.

ICICI Bank May 2012 futures were at a discount of 15.85 point at 799.65 compared with spot closing of 815.50. The number of contracts traded was 21,442. 

Reliance Industries May 2012 futures were at a discount of 10.25 point at 697.25 compared with spot closing of 707.50. The number of contracts traded was 13,937. 

Among Nifty calls, 5000 SP from the May month expiry was the most active call with an addition of 0.64 million open interest.

Among Nifty puts, 4700 SP from the May month expiry was the most active put with  contraction of 0.16 million open interest.

The maximum OI outstanding for Calls was at 5000 SP (6.29 mn) and that for Puts was at 4700 SP (8.03mn).

The respective Support and Resistance levels are: Resistance 4973.7-- Pivot Point 4959.3--Support 4936.35.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.94for May-month contract.

The top five scrips with highest PCR on OI were ABG Ship 47.00, WelCorp 6.63, Asian Paints 2.15, Tata Communication 2.00, and Bomdyeing 1.67.

Among the most active underlying, Suzlon witnessed contraction of 15.54 million of Open Interest in the April month futures contract followed by IFCI which witnessed a contraction of 13.32 million of Open Interest in the near month contract. Meanwhile, Alok Industries witnessed an addition of 22.30 million in the April month futures. Also, RCOM witnessed contraction of 7.16 million in Open Interest in the April month contract. Finally, Jaiprakash Associates witnessed contraction of 4.54 million of Open Interest in the near month futures contract.