Nifty witnesses massacre on global jitters

After witnessing three day’s continues fall Nifty clobbered out of shape and snapped the session below its crucial 5,250 mark on Friday with triple digit cut on the back of another recession in the US while, European debt woes too dampening the sentiments. However, market recovered partially in late noon trades and managed to close near its intraday high but in the red, for the fourth consecutive day following global sell-off on US growth concern. Earlier, the Indian equity market made a gap down start and butchered in the early trade as investors fretted that the world’s largest economy may be heading back into recession while they also remained nervous over European debt crises. Situation got worse afterwards and the index breached its crucial 5,200 mark, when intense selling witnessed in rate sensitive space like Realty and Infra moreover, index heavyweight Reliance Industries too declined below Rs 800 in the late morning trade. Subdued opening in European counterparts too dampened the sentiments and Nifty touched its intraday low near its 5,100 mark but, market got some support at that level and started recovering its initial losses. Moreover, some support also come in from the PSU oil marketing companies which stood tall amidst the sluggish trade after Oil dropped to a six-month low on Thursday. Afterwards, the local index continued to recover till end on the back of short covering witnessed in some selective stocks. Stocks like Hindalco, IRB Infrastructure and JSW Steel reversed their earlier losses and ended the day’s trade with a gain of 0.50-2.50 percent. Finally, Nifty ended the lethargic day of trade with a huge cut of 120 points however, benchmark managed hold its crusial 5,200 mark as partial recovery seen in late noon trade.

On the global front, the US markets suffered sharp sell-off overnight after witnessing a mild pull back in previous session while, blood bath witnessed in Asian region and all Asian equity indices finished the day’s trade in the negative terrain on last trading day of the week amid fears the US may be heading back into recession. Moreover, all the European counterparts were bleeding badly at this point of time. Back home, all the sectoral indices on the NSE were hammered badly and settled in the negative territory with CNX IT losing the most, ending with a cut of about four percent followed by CNX Realty down by 3.48% and CNX Service down by 2.45% on NSE sectoral space. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, zoomed 23.15% and reached 24.90, while S&P Nifty dropped by 120.55 points or 2.26% to close at 5,211.25.

The India VIX closed up by 23.15% at 24.90 on Friday as compared to 20.22 on Thursday.

The 50-share S&P CNX Nifty tumbled 120.55 points or 2.26% and settled at 5,211.25.

Nifty August 2011 futures closed at 5,220.00, at a premium of 8.75 point over spot closing of 5,211.25, while Nifty September 2011 futures were at 5,237.00 at a premium of 25.75 points over spot closing. The near month August 2011 derivatives contract expires on Thursday, August 25, 2011. Nifty August futures saw addition of 6.76% or 1.59 million (mn) units, taking the total outstanding open interest (OI) to 25.23 mn units.

From the most active contract by contract value, SBI’s August 2011 futures closed at a discount of 0.15 points at 2239.75 compared with spot closing of 2239.90. The number of contracts traded was 30,351.

ICICI Bank August 2011 futures were at a discount of 1.65 point at 973.35 compared with spot closing of 975.00. The number of contracts traded was 22,744.

Infosys August 2011 futures were at a discount of 0.30 at 2600.70 compared with spot closing of 2601.00. The number of contracts traded was 16,757.

RIL August 2011 futures were at a premium of 2.05 at 793.95 compared with spot closing of 791.90. The number of contracts traded was 25,150.

Tata Steel August 2011 futures were at a premium of 2.50 at 535.00 compared with spot closing of 532.50. The number of contracts traded was 18,550.

Among Nifty calls, 5300 SP from the August month expiry was the most active call with addition of 1.17 million or 49.25%.

Among Nifty puts, 5100 SP from the August month expiry was the most active put with decline of 1.16 million or 20.49%. The maximum Call OI outstanding for Calls was at 5300 SP (3.55 mn) and that for Puts was at 5100 SP (4.52 mn).

The respective Support and Resistance levels are: Resistance 5255.11-- Pivot Point 5185.78-- Support 5141.91.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.87 for August -month contract.

The top five scrips with highest PCR on OI were Tata Chemicals 3.00, Sun Pharmaceuticals Industries 1.37, JSW Energy 1.25, Jain Irrigation Systems 1.00, GlaxosmithKline Consumer Healthcare 1.00.

Among most active underlying, State bank of India witnessed an addition of 9.95% of Open Interest (OI) in the August month futures contract followed by Reliance which witnessed an addition of 0.33% of Open Interest (OI) in the near month contract. Meanwhile ICICI bank and Infosys witnessed an addition of 1.59% and 8% of OI in the August month futures respectively. Lastly, Tata Steel witnessed an addition of 4.43% of Open Interest (OI) in the August month futures contract