Nifty despite a good start closes below 5,300 mark

Consolidation phase extended yet another day for the Indian markets and indices despite a good start only managed to close with slender gains. Though, there was some optimism regarding the central banks across the globe taking measures to revive the sagging economies but the domestic markets underperformed the regional peers, even the European markets have got a good start. There was some value buying in the rate sensitives and the consumer durables took the markets higher, while the strengthening rupee weighed on the IT sector along with the defensive FMCG sector stocks.

Nifty started higher by around 20 points and it seemed that market will gather some gain tailing its regional counterparts, however there wasn’t much on the domestic front that could support the markets and after initial hour the trade turned range-bound as all was going well with index trading near the 5,300 mark. However, in the late noon session sudden profit booking appeared and took the market in red for some time, though recovery followed soon and the market managed to end in green with modest gains. Sugar stocks were buzzing after the country’s sugar production estimate for 2012-13 was lowered by an industry body due to lower recovery from the standing cane crop because of deficient monsoon rainfall. While, the telecom sector stocks moved higher after Telecom Disputes Settlement and Appellate Tribunal (TDSAT) gave a split verdict on a challenge by mobile phone operators seeking to overturn a government order requiring them to stop offering 3G roaming services beyond their licensed zones.

On NSE sectoral space, CNX FMCG down by 0.87% and CNX IT down by 0.55% were the only two losers. On the other hand, CNX Realty up 2.00% and CNX PSE up by 1.00%, CNX Finance up by 0.87% and CNX Media up by 0.87% remained top gainers. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 2.36% and reached 18.56.

The India VIX witnessed contraction of 2.37% at 18.56 as compared to its previous close of at 19.01 on Monday.

The 50-share S&P CNX Nifty gained 9.35 points or 0.18% to settle at 5,287.95.

Nifty July 2012 futures closed at 5,305.75 at a premium of 17.80 points over spot closing of 5,287.95, while Nifty August 2012 futures were at 5331.20 at a premium of 43.25 points over spot closing. The near month July 2012 derivatives contract will expire on Thursday i.e. July 26, 2012. Nifty July futures saw an addition of 0.62 million (mn) units taking the total outstanding open interest (OI) to 22.64 mn units.

From the most active contract, Tata Motors July 2012 futures were at a discount of 2.10 point at 235.50 compared with spot closing of 237.60. The number of contracts traded was 10,588.

ITC July 2012 futures were at a premium of 0.85 point at 248.75 compared with spot closing of 247.90. The number of contracts traded was 9,876.

DLF July 2012 futures were at a discount of 1.00 point at 212.15 compared with spot closing of 213.15. The number of contracts traded was 9,922.

Tata Steel July 2012 futures were at a discount of 12.20 points at 433.80 compared with spot closing of 446.00. The number of contracts traded was 9,243.

ICICI Bank July 2012 futures were at a premium of 2.90 point at 901.90 compared with spot closing of 899.00. The number of contracts traded was 16,664.   

Among Nifty calls, 5400 SP from the July month expiry was the most active call with an addition of 0.51 million open interest.

Among Nifty puts, 5000 SP from the July month expiry was the most active put with an addition of 0.20 million open interest.

The maximum OI outstanding for Calls was at 5400 SP (5.78mn) and that for Puts was at 5000 SP (6.60mn).

The respective Support and Resistance levels are: Resistance 5314.65 -- Pivot Point 5290.3--Support 5263.6.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.48 for July -month contract.

The top five scrips with highest PCR on OI were APIL 2.00, DIVISLAB 1.50, Sun Pharma 1.36, Ambuja Cement 1.36, and Grasim 1.31.

Among the most active underlying, IFCI witnessed contraction of 1.33 million of Open Interest in the July month futures contract followed by LITL which witnessed contraction of 3.85 million of Open Interest in the near month contract. Meanwhile, UNITECH witnessed an addition of 1.69 million in the July month futures. Also, RCOM witnessed an addition of 1.00 million in Open Interest in the July month contract. Finally, HDIL witnessed an addition of 0.89 million of Open Interest in the near month futures contract.