Nifty resumes south bound journey after two days of halt

S&P CNX Nifty resumed its southbound journey as sentiments turned bearish on Friday tracking sluggish global cues. Moreover, political jitters too dampened the sentiments and market ended the range-bound session with a cut of about 40 points, but managed to hold 5,200 mark. On the global front, Asian markets snapped the session in the red as weak US economic data stoked uncertainties about global growth. Investors’ appetite for risk also got curbed amidst lingering euro zone debts concerns and after China said it would continue to maintain curbs on its property market. Moreover, European counters too exhibited a choppy early session ahead of the Euro-region finance ministers’ conference call to discuss the terms for the Spanish bank bailout today.

Back home, market started the day on a flat note with negative bias tracking mixed trend in other Asian indices. But, the index suddenly lost traction triggered by domestic political uncertainties after two senior leader of ruling coalition government resigned from their ministry. NCP leaders, Sharad Pawar and Praful Patel reportedly sent their resignation to the PM raising issues that the government needs to consider urgently. The party blamed the Congress for misreporting the facts of the current rift between the two allies. Afterwards, market traded in the tight band near its crucial 5,200 bastion. The sentiments also remained subdued after the power companies came under pressure after slapping of 21% duty on imports of power equipment, expressing their disappointment at the decision, power companies have said that the move would raise equipment prices and raise electricity tariffs. In the noon trade market tried to pare some losses but, weak opening in European counters washed out all hopes of any recovery. Moreover, selling in banking space too pressurized the market remaining the biggest loser on concern that there may not be any further rate cuts by the Reserve bank of India (RBI) in its upcoming monetary policy review. Nevertheless, 5,200 proved to be a strong support level for Nifty as the index managed to close above that mark despite falling below the level for 2-3 time. Finally, Nifty snapped the session tad above its crucial 5,200 mark but, with a cut of 0.70 percent.

Meanwhile, most of the sectoral indices on the NSE settled in the red, bank Nifty remained the major loser, down 1.32% followed by CNX Pharma down 1.02% and Bank Realty down 1.01% while CNX Auto and CNX Metal surged 0.28% and 0.07% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, rose 3.11% and reached 16.89.

The India VIX witnessed an addition of 3.11% at 16.89 as compared to its previous close of at 16.38on Thursday.

The 50-share S&P CNX Nifty lost 37.60 points or 0.72% to settle at 5,205.10.

Nifty July 2012 futures closed at 5,216.60 at a premium of 11.50 points over spot closing of 5,205.10, while Nifty August 2012 futures were at 5239.05 at a premium of 33.95 points over spot closing. The near month July 2012 derivatives contract will expire on Thursday i.e. July 26, 2012. Nifty July futures saw contraction of 0.42 million (mn) units taking the total outstanding open interest (OI) to 23.30 mn units.

From the most active contract, BHEL July 2012 futures were at a premium of 1.05 point at 228.80 compared with spot closing of 227.75. The number of contracts traded was 12,115.

Tata Steel July 2012 futures were at a premium of 0.50 point at 416.30 compared with spot closing of 415.80. The number of contracts traded was 9,847.

ICICI Bank July 2012 futures were at a premium of 3.55 point at 938.60 compared with spot closing of 935.05. The number of contracts traded was 20,882.

Axis Bank July 2012 futures were at a premium of 2.80 points at 1043.80 compared with spot closing of 1041.00. The number of contracts traded was 14,360.

SBI July 2012 futures were at a premium of 2.45 point at 2,136.90 compared with spot closing of 2,134.45. The number of contracts traded was 33,425.  Among Nifty calls, 5300 SP from the July month expiry was the most active call with an addition of 1.60 million open interest.

Among Nifty puts, 5000 SP from the July month expiry was the most active put with contraction of 0.05 million open interest.

The maximum OI outstanding for Calls was at 5300 SP (10.57mn) and that for Puts was at 5000 SP (7.69 mn).

The respective Support and Resistance levels are: Resistance 5230.03 -- Pivot Point 5213.76--Support 5188.83.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.14 for July -month contract.

The top five scrips with highest PCR on OI were AIL 4.00, Bajaj-Auto 2.95, Cromp Greav 1.38, Divis Lab 1.29, and Gail 1.23.

Among the most active underlying, IFCI witnessed contraction of 5.46 million of Open Interest in the July month futures contract followed by Unitech which witnessed contraction of 7.64 million of Open Interest in the near month contract. Meanwhile, RCOM witnessed contraction of 0.14 million in the July month futures. Also, JP Associates witnessed contraction of 0.63 million in Open Interest in the July month contract. Finally, Tata Motors witnessed contraction of 1.52 million of Open Interest in the near month futures contract.