Nifty resumes southbound journey on weak global cues

The fifty stock index -- Nifty -- resumed its southward journey after a day’s halt and finished the choppy day of trade with a cut of over a percent after languishing in the negative zone throughout the day on the back of weak cues from global peers. Earlier, the index opened in the red tracking weak global cues and breached its crucial 5,500 level in the initial trade. Moreover, foreign funds and retail investors booked profits of yesterday’s session, dampening the sentiments. The local index extended its losses as sentiments remained subdued after the Prime Minister’s Economic Advisory Council (PMEAC) lowered the economic growth projection for the current fiscal to 8.2 percent from 9 percent earlier. Afterwards, market traded in the tight band till early noon trade as there was no positive trigger for the investors. The domestic index lost some more ground and touched its intraday low in noon trade and breaching its psychological 5,450 mark taking cues from weak European counterparts. Moreover, metal stocks weighed on the sentiments as Global metal prices fell on Monday. Stocks like, Welspun Corp, Bhushan Steel, Jindal Saw, Sterlite Industries, NMDC, Hindalco Industries and Sesa Goa all finished the day’s trade with a cut in the range of 2-3 percent. However, index got strong support near its crucial 5,450 level and made a recovery of about 25-30 in the last hour of trade as index heavy weights pared their initial losses and turned in the green. Moreover, Fertilizer stocks remained in the jubilant mood amidst the reports that the Committee of Secretaries (CoS) will meet Finance Minister (FM) on urea deregulation on August 5. Stocks like Rashtriya Chemicals and Fertilizers, National Fertilizers, Chambal Fertilizers and Chemicals, Nagarjuna Fertilizer & Chemicals, Deepak Fertilizers and Petrochemicals Corporation and Gujarat State Fertilizers Company all edged higher in the trade. Finally, Nifty ended the sluggish day of trade with a cut of over a percentage point.

On the global front, the US markets made a soft closing overnight on the back of weak manufacturing data while, all the Asian equity indices ended the day’s trade in the negative terrain on Tuesday following weak closing of Wall Street. Moreover, all the European counterparts were trading in the red where, major indices like CAC, DAX and FTSE all were witnessing cut of over 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 and half a percent followed by Bank Nifty down by 1.79% and CNX Realty down by 1.73% while, CNX Energy up 0.57% and CNX Pharma up by 0.22% remained the only gainers on NSE sectoral space. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, rose 1.97% and reached 19.15, while S&P Nifty dropped by 60.25 points or 1.09% to close at 5,456.55.

The India VIX  closed at 19.15 up by1.97% on Tuesday as compared to 18.82 on Monday 

The 50-share S&P CNX Nifty offloaded 60.25 points or 1.09% and settled at 5,456.55.

Nifty August 2011 futures closed at 5,467.45, at a premium of 10.90 point over spot closing of 5,456.55, while Nifty September 2011 futures were at 5,485.00 at a premium of 28.45 points over spot closing. The near month August 2011 derivatives contract expires on Thursday, August 25, 2011. Nifty August futures saw addition of 11.21% or 2.25 million (mn) units, taking the total outstanding open interest (OI) to 22.39 mn units.

From the most active contract by contract value, SBI's August 2011 futures closed at a premium of 10.80 points at 2290.45 compared with spot closing of 2279.65. The number of contracts traded was 19,018.

RIL August 2011 futures were at a premium of 1.45 point at 839.00 compared with spot closing of 837.55. The number of contracts traded was 20,218.

JSW Steel August 2011 futures were at a premium of 3.90 at 673.90 compared with spot closing of 670.00. The number of contracts traded was 23,903.

ICICI Bank August 2011 futures were at a premium of 5.20 at 1030.20 compared with spot closing of 1025.00. The number of contracts traded was 12,242.

Tata Steel August 2011 futures were at a discount of 1.00 at 565.00 compared with spot closing of 566.00. The number of contracts traded was 9,659.  Among Nifty calls, 5500 SP from the August month expiry was the most active call with addition of 1.32 million or 27.66%.

Among Nifty puts, 5400 SP from the August month expiry was the most active put with addition of 0.25 million or 3.87%.

The maximum Call OI outstanding for Calls was at 5600 SP (6.10 mn) and that for Puts was at 5500 SP (6.80 mn).

The respective Support and Resistance levels are: Resistance 5490.68-- Pivot Point 5462.16-- Support 5428.03.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.02 for August -month contract.

The top five scrips with highest PCR on OI were IRB Infra 6.00, Tata Chemicals 3.00, Jindal Saw 2.00, Ambuja Cement 1.40 and Sun Pharmaceuticals Industries 1.39.

Among most active underlying, Reliance witnessed a decline of 0.18% of Open Interest (OI) in the August month futures contract followed by SBI witnessed an addition of 7.48% of Open Interest (OI) in the near month contract. Meanwhile JSW Steel witnessed an addition of 5.29% of OI in the August month futures.