Nifty snaps July F&O series down by 2.83%

The S&P CNX Nifty finally finished its sluggish run for the July series below its crucial 5,500 level as global cues remained lethargic, moreover the index performed choppy throughout the series and closed lower by 159.65 points or 2.83 percent compared to last series. Earlier, the Indian equity market made a gap down start on the back of weak cues from global equity indices and Nifty breached its crucial 5,500 mark in initial trade as sentiments got dampened on heavy selling witnessed by funds and retail investors in the wake of the latest 50 basis points hike in short-term lending rates by the Reserve Bank of India (RBI). Afterwards, the benchmark traded in the tight range till end as there was no positive trigger in the market. Moreover, Finance Minister Pranab Mukherjee’s statement that the RBI might hike policy rates again as inflation was unlikely to come down to a comfortable level this year, raised the cautiousness among the investors and the India Inc. The local index continued to trade in the red in mid noon trade as European markets too showed a week run. Meanwhile, IT firms remained under pressure during the trade as rupee hit near 3 year high against dollar. Infosys, TCS, Wipro and HCL Technologies all ended the trade with a cut in a range of 1.50-2 percent. However, FMCG space held some traction during the trade and snapped the session with a gain of over a percentage point after heavyweight ITC surged over two and half a percent on announcing better than expected earnings for Q1 FY 12. Finally, Nifty ended the sluggish day of trade with a cut of about 60 point below its crucial 5,500 level.

On the global front, The US markets plunged deeper into red overnight as the impasse on increasing debt limit continued while; Asian markets continued their downfall and all the indices in the region barring Hang Seng finished the day’s trade in the negative terrain on Thursday. Moreover, all the European counterparts were trading in the red where major indices like CAC and DAX were trading with a cut of over one and half a percent 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 Energy down by 1.76% and CNX Realty down by 1.69% while, CNX FMCG up 1.08% and CNX Pharma up by 0.32% remained the only gainers on NSE sectoral space. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 1.42% and reached 18.51, while S&P Nifty dropped by 59.05 points or 1.06% to close at 5,487.75.

The India VIX witnessed a gain of 1.42% at 18.51 on Thursday as compared to its previous close of 18.25 on Wednesday.  

The 50-share S&P CNX Nifty lost 59.05 points or 1.06% and settled at 5,487.75.

Nifty July 2011 futures closed at 5,488.25, at a premium of 0.50 point over spot closing of 5,487.75, while Nifty August 2011 futures were at 5,498.90 at a premium of 11.15 points over spot closing. The near month July 2011 derivatives contract expires today. Nifty July futures saw contraction of 10.98% or 1.43 million (mn) units, taking the total outstanding open interest (OI) to 11.63 mn units.

From the most active contract by contract value, RIL July 2011 futures closed at a discount of 0.50 points at 837.20 compared with spot closing of 837.70. The number of contracts traded was 36,015.

SBI’s July 2011 futures were at a discount of 5.20 point at 2356.60 compared with spot closing of 2361.80. The number of contracts traded was 24,047.

RIL August 2011 futures were at a premium of 4.65 at 842.35 compared with spot closing of 837.70. The number of contracts traded was 33,574.

SBI’s August 2011 futures were at a discount of 0.60 at 2361.20 compared with spot closing of 2361.80. The number of contracts traded was 21,811.

Infosys July 2011 futures were at a premium of 7.85 at 2750.85 compared with spot closing of 2743.00. The number of contracts traded was 12,703.  Among Nifty calls, 5600 SP from the August month expiry was the most active call with addition of 0.93 million or 32.08%.

Among Nifty puts, 5500 SP from the August month expiry was the most active put with addition of 0.70 million or 21.23%.

The maximum Call OI outstanding for Calls was at 5600 SP (3.83 mn) and that for Puts was at 5500 SP (4.04 mn).

The respective Support and Resistance levels are: Resistance 5508.01 -- Pivot Point 5491.83 -- Support 5471.56.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.04 for August -month contract.

The top five scrips with highest PCR on OI were IRB Infra 6.00, Central Bank 1.50, Dr Reddy 1.22, Maruti 1.22 and Sun Pharma 1.22.

Among most active underlying, RIL witnessed an addition of 48.68% of Open Interest (OI) in the August month futures contract followed by SBI witnessed an addition of 42.20% of Open Interest (OI) in the near month contract. Meanwhile JSW Steel witnessed an addition of 28.11% of OI in the August month futures. Also, ICICI Bank witnessed an addition of 26.99% of Open Interest (OI) in the August month contract while Tata Motors witnessed an addition of 24.71% of OI in the August month futures.