Nifty snaps July F&O series with a massive cut of over 2%

The domestic index S&P CNX Nifty finished the July F&O series with a massive cut of about 106 points or 2.10%, after gaining over 4.5% in June series. Today, Nifty traded in the tight band near its crucial 5,100 level but, got hammered in the final hour of trade as investors wound up their long positions, which were built up on expectations of a diesel price hike and other reforms by the government, post presidential election. Global cues too failed to support the domestic sentiments as European stock markets bashed the sentiments, trading negatively in early trade as investors reacted to a slew of downbeat earnings across sectors and blue-chip names. While, most of the Asian markets went home in green on Thursday tracking upbeat earnings results in the region and the United States.

Earlier, the benchmark kick started on a flat-to-negative note. The sentiments remain dampened after Agriculture Minister Sharad Pawar raised the prospect of drought for the first time this year, saying officials would discuss next week the so-far meager monsoon rains that are key to the economy of this major consumer and producer of food crops. The sentiments also got bashed as shares of companies engaged in Aviation sector butchered after the International Air Transport Association (IATA) said that India’s aviation is in a multi-faceted crisis. IATA director general Tony Tyler warned that in light of critical domestic problems not being addressed, foreign investors may not line up to put their cash in Indian airlines, even if the country allows 49% FDI in Aviation sector. Afterwards, market traded in the tight band near its crucial 5,100 mark due to lack of local and global triggers. PSU oil marketing companies also edged lower in the trade on account of rise in international crude oil prices. But, it was the last leg of trade where selling got intensified and market tumbled around 60 points as traders wound up their positions. Finally, Nifty snapped the day’s trade near intraday low with a cut of 1.30 percent.

Meanwhile, all the sectoral indices on the NSE hammered badly and settled in the red, CNX Realty remained the major loser, losing 3.54% followed by CNX PSU Bank down 2.88% and Bank Nifty down by 1.79% in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, tumbled 2.27% and reached 16.37.

The India VIX witnessed contraction of 2.27% at 16.37 as compared to its previous close of at 16.75 on Wednesday.

The 50-share S&P CNX Nifty lost 66.60 points or 1.30% to settle at 5,043.00.

Nifty August 2012 futures closed at 5,081.30 at a premium of 38.30 points over spot closing of 5,043.00, while Nifty September 2012 futures were at 5108.75 at a premium of 65.75 points over spot closing. The near month August 2012 derivatives contract will expire on Thursday i.e. August 30, 2012. Nifty August futures saw addition of 5.19 million (mn) units taking the total outstanding open interest (OI) to 20.54 mn units.

From the most active contract, Tata Motors August 2012 futures were at a premium of 1.15 point at 207.15 compared with spot closing of 206.00. The number of contracts traded was 18,432.

Tata Steel August 2012 futures were at a premium of 2.95 point at 387.25 compared with spot closing of 384.30. The number of contracts traded was 20,525.

ICICI Bank August 2012 futures were at a premium of 2.05 point at 913.50 compared with spot closing of 911.45. The number of contracts traded was 24,734.

SBI August 2012 futures were at a discount of 5.05 points at 2013.95 compared with spot closing of 2019.00. The number of contracts traded was 29,361.

Infosys August 2012 futures were at a premium of 23.35 point at 2141.35 compared with spot closing of 2118.00. The number of contracts traded was 15,666.

Among Nifty calls, 5200 SP from the August month expiry was the most active call with an addition of 1.20 million open interest.

Among Nifty puts, 5000 SP from the August month expiry was the most active put with an addition of 1.15 million open interest.

The maximum OI outstanding for Calls was at 5300 SP (3.81mn) and that for Puts was at 5000 SP (7.20 mn).

The respective Support and Resistance levels are: Resistance 5102.06 -- Pivot Point 5067.23--Support 5008.16.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.29 for July-month contract.

The top five scrips with highest PCR on OI were ON Mobile 17.00, Siemens 2.57, BGR Energy 2.33, PUNJ LLOYD 2.08, and PNB 1.58.

Among the most active underlying, Suzlon witnessed an addition of 15.29 million of Open Interest in the August month futures contract followed by IFCI which witnessed an addition of 16.20 million of Open Interest in the near month contract. Meanwhile, LITL witnessed an addition of 25.70 million in the August month futures. Also, Unitech witnessed an addition of 15.02 million in Open Interest in the August month contract. Finally, RCOM witnessed an addition of 8.18 million of Open Interest in the near month futures contract.