Nifty breaches 4,850 mark on economic growth concerns

The fifty stock index -- Nifty -- continued its southbound journey for third day in a row on Friday and ended in deep red with a massive cut of over one and a half percent breaching 4,850 mark on concerns over economic growth slowdown and subdued growth outlook for fiscal 2013 amid weak global cues. On the global front, overnight, the US government lowered its estimate for first-quarter economic growth, to 1.9 percent from 2.2 percent following two jobs reports -- weekly unemployment claims and private-sector job creation in May -- both were disappointing, indicating slow improvement in the economy. Adding fuel to the fire, manufacturing activity in China grew at a much slower rate than expected in May. The official purchasing managers index (PMI) fell to 50.4 from 53.3 in April. Moreover, European counters too were trading in the red at this point of time.

The Indian equity market made a soft start triggered by weak global cues and disappointing GDP numbers that were announced yesterday. However, market held its nerves till mid morning trade supported by Banking stocks, which surged in the early trade on hopes that the Reserve Bank of India (RBI) will cut interest rates to revive growth after sharp deceleration in GDP growth in Q4 March 2012 but currently erased all early gains. But, market witnessed a steep fall of about 30 points breaching its crucial 4,900 mark in mid morning trade as investors started losing confidence amid subdued growth outlook for fiscal 2013. Moreover, reports indicating that monsoon rains over India's mainland will be delayed by about four days also weighed on sentiments. Meanwhile, India's manufacturing sector kept up its steady expansion in May, with fast-rising output evened out by slowing growth of domestic order books. The HSBC manufacturing Purchasing Managers' Index, slipped marginally to 54.8 in May from 54.9 in April. In addition, India’s exports rose by 3.23% to $24.45 billion in the month of April 2012 as compared to the same month last year when they stood at $23.69 billion. Imports, on the other hand also rose by 3.83% year-on-year to $37.94 billion against the $36.54 billion in April 2011. Market continued its downtrend till end following weakness in European markets as the euro-zone’s manufacturing sector contracted at its steepest pace in nearly three years last month as the debt crisis hammered confidence and new orders continued to dry up. Finally, Nifty ended the day’s trade near its intraday low with a cut of over 80 points.

Meanwhile, most of the sectoral indices on the NSE settled in the negative territory with CNX Media losing the most, ending with a cut of 3.29% followed by CNX PSU Bank down by 2.21% and CNX Infra down by 2.07% while, CNX FMCG up 0.35% remained the lone gainer on NSE sectoral space. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, rose 6.01% and reached 26.77.

The India VIX witnessed an addition of 6.02% at 26.77 as compared to its previous close of at 25.25 on Thursday.

The 50-share S&P CNX Nifty lost 82.65 by point or 1.68% to settle at 4841.60.

Nifty June 2012 futures closed at 4,824.55 at a discount of 17.05 points over spot closing of 4,841.60, while Nifty July 2012 futures were at 4,841.15 at a discount of 0.45 points over spot closing. The near month June 2012 derivatives contract will expire on Thursday i.e. June 28, 2012. Nifty June futures saw an addition of 1.02 million (mn) units taking the total outstanding open interest (OI) to 15.37 mn units. 

From the most active contract, Tata Motors June 2012 futures were at a premium of 3.10 point at 226.15 compared with spot closing of 223.05. The number of contracts traded was 28,046.

HDIL June 2012 futures were at a premium of 0.10 point at 63.75 compared with spot closing of 63.65. The number of contracts traded was 10,300.

Tata Steel June 2012 futures were at a discount of 8.30 points at 390.30 compared with spot closing of 398.60. The number of contracts traded was 12,444.

ICICI Bank June 2012 futures were at a premium of 2.35 point at 783.80 compared with spot closing of 781.45. The number of contracts traded was 17,915.

 JSW Steel June 2012 futures were at a premium of 2.65 point at 602.15 compared with spot closing of 599.50. The number of contracts traded was 7,913.

Among Nifty calls, 5000 SP from the Jun month expiry was the most active call with an addition of 0.96 million open interest.

Among Nifty puts, 4500 SP from the Jun month expiry was the most active put with an addition of 0.88 million open interest.

The maximum OI outstanding for Calls was at 5000 SP (4.83 mn) and that for Puts was at 4500 SP (6.59 mn).

The respective Support and Resistance levels are: Resistance 4900.48-- Pivot Point 4866.11--Support 4807.23.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.46 for Jun -month contract.

The top five scrips with highest PCR on OI were ABG Ship 7.50, Central Bank 2.00, India cement 2.00, TECHM 1.14 and Siemens 1.38.

Among the most active underlying, Suzlon witnessed an addition of 1.56 million of Open Interest in the April month futures contract followed by IFCI which witnessed a contraction of 0.84 million of Open Interest in the near month contract. Meanwhile, RCOM witnessed an addition of 0.98 million in the April month futures. Also, Tata Motors witnessed an addition of 2.02 million in Open Interest in the April month contract. Finally, Jaiprakash Associates witnessed contraction of 0.01 million of Open Interest in the near month futures contract.