Late wave of selling drags Nifty lower

Late hour sell-off propelled Nifty to snap the session near its pre-close level after investors booked their profits garnered in previous two sessions, in dying market hours amid turnaround in European markets. The European counters fell from a four-month high and the euro weakened on the back of earning disappointment and German exports dropped more than expected. German exports fell 1.5% in June from the previous month. Though, most of the Asian markets made a positive close on better corporate earnings report from US that boosted the outlook for the economy. The Japanese market surged by over a percent ahead of Bank of Japan’s two-day policy meeting starting today. Back home, weak monsoon, high interest rates, increasing twin deficits, stubborn inflation and policy impasse at the Centre too dampened the sentiments.

Earlier, domestic benchmark picked up the pace, after a flat start, following buoyed global cues. Moreover, on hopes that the government will go forward with the reform measures as Vice Presidential elections are over supported the sentiments to cross crucial 5,350 level. Afterwards, market continued its northward journey and touched its intraday high near important 5,380 mark in mid noon trade following decent opening in European counters. But, in the final hour of trade market witnessed a steep fall of about 40 points as European counters took a U-turn, falling from a four-month high due to earning disappointment and fall in German exports. The traders also remain worried after rating agency CRISIL cut India’s Gross Domestic Product (GDP) growth forecast to 5.5 percent for financial year 2012-13 from 6.5 percent earlier. In addition, Citigroup and CLSA also slashed their outlook for growth to 5.4 percent and 5.5 percent respectively in the fiscal year ending March. The regular disruption of the Parliament on the first day of monsoon session also created doubts over the government’s ability to push through key economic bills. Bharti Airtel disappointed the street, leading to over six and half a percent fall in its stock price. The company, on consolidated basis, reported a decline of 37.28% in its net profit at Rs 762.20 crore for Q1FY13 as compared to Rs 1215.20 crore for Q1FY12. However, the downside of the bourses in today’s trading session remain capped mainly on account of uptick of market bellwether Reliance Industries, which amassed gains of over half a percent after management committee for the D6 field in Krishna-Godavari (KG) basin on August 7 conditionally approved the budget. Finally, Nifty ended the session near its pre-close level with slender gain.

Meanwhile, most of the sectoral indices on the NSE were settled in the red, CNX Realty remained the major loser, down 2.23% followed by CNX Infra down 1.48% and Bank Nifty down by 0.59% while CNX Auto and CNX Metal surged 1.04% and 0.74% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 0.99% and reached 16.37.

The India VIX witnessed an addition of 0.99% at 16.37 as compared to its previous close of at 16.21 on Tuesday.

The 50-share S&P CNX Nifty gained 1.30 points or 0.02% to settle at 5,338.00.Nifty August 2012 futures closed at 5354.75 on Wednesday at a premium of 16.75 points over spot closing of 5,338.00, while Nifty September 2012 futures were at 5380.20 at a premium of 42.20 points over spot closing. Nifty August futures saw an addition of 0.47 million (mn) units taking the total outstanding open interest (OI) to 23.69 mn units. The near month August 2012 derivatives contract will expire on Thursday i.e. August 30, 2012.

From the most active contracts, Tata Motors August 2012 futures were at a premium of 1.85 points at 241.75 compared with spot closing of 239.90. The number of contracts traded was 18,549.

Bharti Airtel August 2012 futures were trading flat compared with spot closing of 274.90. The number of contracts traded was 27,446.

IndiaBulls Real Estate August 2012 futures were at a discount of 0.80 point at 54.40 compared with spot closing of 55.20. The number of contracts traded was 10,531.

Tata Steel August 2012 futures were at a premium of 3.55 points at 410.60 compared with spot closing of 407.05. The number of contracts traded was 13,489.

ICICI Bank August 2012 futures were at a premium of 5.30 point at 963.20 compared with spot closing of 957.90. The number of contracts traded was 17,004. 

Among Nifty calls, 5500 SP from the August month expiry was the most active call with contraction of 0.40 million open interest.

Among Nifty puts, 5000 SP from the August month expiry was the most active put with an addition of 0.10 million open interest.

The maximum OI outstanding for Calls was at 5500 SP (8.86 mn) and that for Puts was at 5000 SP (10.64 mn).

The respective Support and Resistance levels are: Resistance 5366.71 -- Pivot Point 5348.88 -- Support 5320.16.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.54 for August -month contract.

The top five scrips with highest PCR on OI were SKUMARSYNF 6.50, Orient Bank 5.00, WEL Corp 3.23, YES Bank 2.25, and PTC 2.25.