The fifty stock index -- Nifty – extended its downfall for second straight day and finished the choppy day of trade with a cut of half a percent after languishing in the negative zone for most part of the day .Selling was again witnessed in rate sensitive space after 50 basis points (bps) rate hike by the Reserve Bank of India (RBI) while, concerns of US debt default too dampened the investors’ sentiments. Earlier, the Indian equity market made a positive start on the back of bargain hunting witnessed in selective counters but, the benchmarks dipped into the red as investors remained cautious ahead of July F&O series expiry. The local index traded in the tight band till mid morning session but, it lost its direction in the late morning trade and witnessed a sharp fall as European counterparts opened on a weak note. The market continued its southward journey and touched its intraday low in the mid afternoon trade, breaching its crucial 5,550 level as rate sensitive Banking and Infra space remained under pressure after an unexpected 50 bps rate hike by RBI. The scrips like ICICI Bank, SBI, Axis Bank all ended the trade with a cut of over one and a half percent, while Infra stocks like IVRCL down 2.92%, Jaypee Infratech down 3.27%, Lanco Infratech down 1.85% and IRB Infra down by 8.07%. Moreover, BHEL extended yesterday’s fall and snapped the day’s trade with a cut of about four and a half percent after reporting a lower than expected result. Lupin too tumbled over three percent on reporting disappointing Q1 numbers. The company’s net profit for the quarter declined by 53.79 percent at Rs 72.75 crore as compared to Rs 157.42 crore for the similar quarter of the previous fiscal. But, index got strong support near its crucial 5,500 level and made a recovery of about 20-25 points in the last half an hour of trade. Finally, Nifty ended the sluggish day of trade with a cut of 0.50 percentage point.
On the global front, the US markets extended their fall overnight as there was no resolution in sight for the US debt impasse while, most of the Asian equity indices finished the day’s trade in the positive terrain on Wednesday but, investors remained cautious amid the continuing stalemate over raising the US debt ceiling. Moreover, most of the European counterparts were trading in the red at this point of time. Back home, most of the sectoral indices on the NSE settled in the negative territory with CNX PSU Bank losing the most, ending with a cut of about two percent followed by CNX PSE down by 1.11% and Bank Nifty down by 1.03% while, CNX MNC up 0.08% and CNX FMCG up by 0.07% remained the only gainers on NSE sectoral space. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 5.44% and reached 18.25, while S&P Nifty dropped by 28.05 points or 0.50% to close at 5,546.80.
The India VIX witnessed a decline 5.44% at 18.25 on Wednesday as compared to its previous close of 19.30 on Tuesday.
The 50-share S&P CNX Nifty declined 28.05 points or 0.50% to settle at 5,546.80.
Nifty July 2011 futures closed at 5,547.95, at a premium of 1.15 point over spot closing of 5,546.80, while Nifty August 2011 futures were at 5,557.80 at a premium of 11.00 points over spot closing. The near month July 2011 derivatives contract expires on Thursday, 28 July, 2011. Nifty July futures saw an addition of 5.73% or 0.88 million (mn) units, taking the total outstanding open interest (OI) to 16.34 mn units.
From the most active contract by contract value, SBI’s July 2011 futures closed at a premium of 6.40 points at 2413.40 compared with spot closing of 2407.00. The number of contracts traded was 29,062.
SBI’s August 2011 futures were at a premium of 10.20 point at 2417.20 compared with spot closing of 2407.00. The number of contracts traded was 18,001.
L&T’s July 2011 futures were at a discount of 0.20 at 1758.00 compared with spot closing of 1758.20. The number of contracts traded was 10,778.
RIL July 2011 futures were at a premium of 0.50 at 861.30 compared with spot closing of 860.80. The number of contracts traded was 21,791.
ICICI Bank July 2011 futures were at a premium of 1.85 at 1027.65 compared with spot closing of 1025.80. The number of contracts traded was 18,154.
Among Nifty calls, 5700 SP from the July month expiry was the most active call with an addition of 1.89 million or 21.38%.
Among Nifty puts, 5600 SP from the July month expiry was the most active put with a decline of 1.05 million or 9.41%.
The maximum Call OI outstanding for Calls was at 5600 SP (10.74 mn) and that for Puts was at 5500 SP (10.12 mn).
The respective Support and Resistance levels are: Resistance 5585.17 -- Pivot Point 5553.33 -- Support 5514.97.
The Nifty Put Call Ratio (PCR) OI wise stood at 0.90 for July month contract.
The top five scrips with highest PCR on OI were MRF 2.25, Sun Pharmaceuticals Industries 1.97, Sun TV 1.53 Punjab National Bank 1.46, and Axis Bank 1.36.
Among most active underlying, SBI witnessed a decline of 26.35% of Open Interest (OI) in the July month futures contract followed by RIL which too witnessed a decline of 5.77% of Open Interest (OI) in the near month contract. Meanwhile BHEL witnessed an addition of 84.29% of OI in the July month futures.
