Nifty continue to wilt for sixth straight session

Nifty continued its south-bound journey for the sixth straight session and ended the very volatile day of trade below its crucial 5,100 mark as financial crisis in the US and Europe continued to hurt sentiments. However, market pared all its losses in mid noon trades but, again lost some ground in late trade and snapped the session with a cut of around a percentage point. The Indian equity market were butchered in the early trade witnessing a gap down start as investors’ remained under pressure from debt worries in the West. The index slipped below the 5,000-mark in the opening trade for the first time since June 10, 2010, with heavy selling in stocks like Reliance Industries, Infosys, ICICI Bank and TCS. Meanwhile, Metal stocks like Tata Steel, Sterlite Industries, Jindal Steel & Power, SAIL and Nalco crumbled in early trade, weighing on the sentiments after global metal prices dropped on worries that global economic slowdown may crimp demand for industrial metals. Afterwards, in mid afternoon trade the benchmark regained strength and got a glimpse of green on the back of bargain hunting in fundamentally strong stocks. Moreover, market regained its crucial 5,100 mark after rating agency S&P’s statement that there would be no immediate impact of US rating cut on India provided the much-needed relief and recovery in Asian markets too aided the sentiments. In the late trade, market again swung to the red terrain amid a steep fall in European counterparts and breached its crucial 5,100 mark while, the market saw huge swings before closing the trade. India's volatility index hit an all-time high of 34.31 on global uncertainties. Meanwhile, Technology stocks continued to reel under selling pressure as major revenues for these companies come from US and Europe. Stocks like Wipro, TCS and Infosys lost 3-4.5 percent in the trade. Finally, Nifty ended the very volatile day of trade with a cut of about 45 points below its crucial 5,100 mark as sentiment weighed down in late trade.

On the global front, The US markets were butchered on Monday in first reaction to the credit downgrade by S&P from its top notch AAA rating while, all the Asian equity indices continued to wilt under pressure and snapped the day’s trade in the red. Moreover, all the European counterparts were trading in the red where, major indices like CAC, DAX and FTSE all were witnessing cut in the range of 1.5-3.5 percent at this point of time. Back home, most of the sectoral indices on the NSE settled in the negative territory with CNX IT losing the most, ending with a cut of over three and half a percent followed by CNX Pharma down by 3.00% and CNX Energy down by 1.49% while, CNX FMCG up by 1.21% remained the lone gainers on NSE sectoral space. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, zooms 21.19% and reached 34.88, while S&P Nifty dropped by 45.65 points or 0.89% to close at 5,072.85.

The India VIX closed up by 21.19% at 34.88 on Tuesday as compared to 28.78 on Monday.

The 50-share S&P CNX Nifty shed 45.65 points or 0.89% and settled at 5,072.85.

Nifty August 2011 futures closed at 5,095.60, at a premium of 22.75 point over spot closing of 5,072.85, while Nifty September 2011 futures were at 5,106.60 at a premium of 33.75 points over spot closing. The near month August 2011 derivatives contract expires on Thursday, August 25, 2011. Nifty August futures saw addition of 11.47% or 2.72 million (mn) units, taking the total outstanding open interest (OI) to 26.44 mn units.

From the most active contract by contract value, SBI’s August 2011 futures closed at a premium of 11.30 points at 2239.80 compared with spot closing of 2228.50. The number of contracts traded was 41,262.

ICICI Bank August 2011 futures were at a premium of 3.05 point at 941.05 compared with spot closing of 938.00. The number of contracts traded was 32,398.

L&T August 2011 futures were at a discount of 11.00 at 1601.00 compared with spot closing of 1612.00. The number of contracts traded was 18,988.

RIL August 2011 futures were at a premium of 2.40 at 769.90 compared with spot closing of 767.50. The number of contracts traded was 30,268.

Tata Steel August 2011 futures were at a premium of 2.50 at 488.50 compared with spot closing of 486.00. The number of contracts traded was 22,744. DLF August 2011 futures were at a premium of 0.70 at 196.00 compared with spot closing of 195.30. The number of contracts traded was 22,553.

Among Nifty calls, 5200 SP from the August month expiry was the most active call with decline of 0.25 million or 5.10%.

Among Nifty puts, 5000 SP from the August month expiry was the most active put with an addition of 0.01%.

The maximum Call OI outstanding for Calls was at 5200 SP (4.64 mn) and that for Puts was at 5000 SP (7.08 mn).

The respective Support and Resistance levels are: Resistance 5177.75-- Pivot Point 5177.75-- Support 5177.75.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.93 for August -month contract.

The top five scrips with highest PCR on OI were Bombay Rayon Fashions 6.00, MRF 4.00, Tata Chemicals 3.00, Sun Pharmaceuticals Industries 1.60 and Hero Motor Corporation 1.00.

Among most active underlying, State bank of India witnessed an addition of 7.54% of Open Interest (OI) in the August month futures contract followed by L&T which witnessed an addition of 14.86% of Open Interest (OI) in the near month contract. Meanwhile ICICI Bank and RIL witnessed an addition of 12.36% and 2.64% of OI in the August month futures respectively. Lastly, Suzlon witnessed an addition of 10.90% of Open Interest (OI) in the August month futures contract.