Nifty snaps two days winning streak on profit booking

After witnessing decent gains in previous two sessions, the domestic index S&P CNX Nifty consolidated on Thursday to end the day’s trade marginally lower, as investors opted to book profits in FMCG, bank and metal sectors amid a weak global trend. Most of the Asian markets ended higher on Thursday but gains were limited ahead of European Central Bank policy measures announcements in the coming week while, European counters and the euro traded lower in the opening session after global growth engine China warned its trade outlook was worsening and stronger US data tempered expectations of additional stimulus from the Federal Reserve. Back home, the rupee fell 39 paise to 56.04 to the dollar in early trade after the US currency strengthened again.

Earlier, the benchmark got off with a positive start supported by rally in Auto space, which rose on hopes that the central bank will find more space to ease monetary policy after inflation based on the wholesale price index eased in July 2012. But, the upward trend proved short-lived and the index nose-dived into the red terrain after initial half an hour of trade as concern over deficient rain and drought like situation kept markets under pressure; rice production is poised to slump from a record, as the worst monsoon since 2009 has reduced planting. However, the index tried twice to get back its positive zone but the recovery proved ephemeral as market-men continued to book profit near pre-close level. The main pressure came in the frontline indices from FMCG counter as the sector itself lost over two percent as below normal monsoon triggered profit booking after recent rally. The monsoon has been less than average during the current year. Moreover, the pressure was also increased by fall in shares of metal companies, which extended their losses tracking weakness in industrial metal prices on the London Metal Exchange. Finally, market ended the day’s trade with a cut of about 20 points but, managed to hold its crucial 5,350 bastion.

Meanwhile, most of the sectoral indices on the NSE were settled in the red, CNX FMCG remained the major loser, down 2.02% followed by CNX Metal down 1.29% and Bank Nifty down by 0.88% while CNX Auto and CNX Infra surged 0.69% and 0.18% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, rose 0.32% and reached 15.69.

The India VIX witnessed an addition of 0.32% at 15.69 as compared to its previous close of at 15.64 on Tuesday.

The 50-share S&P CNX Nifty lost 17.40 points or 0.32% to settle at 5,362.95.Nifty August 2012 futures closed at 5382.00 on Thursday at a premium of 19.05 points over spot closing of 5,362.95, while Nifty September 2012 futures were at 5409.55 at a premium of 46.60 points over spot closing. Nifty August futures saw contraction of 0.11 million (mn) units taking the total outstanding open interest (OI) to 25.83 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 0.10 points at 235.80 compared with spot closing of 235.70. The number of contracts traded was 13,542.

ITC August 2012 futures were trading at a premium of 1.65 points at 259.85 compared with spot closing of 258.20. The number of contracts traded was 7,852.

IDFC August 2012 futures were at a premium of 0.10 point at 142.40 compared with spot closing of 142.30. The number of contracts traded was 8,561.

Tata Steel August 2012 futures were at a premium of 2.75 points at 400.55 compared with spot closing of 397.80. The number of contracts traded was 13,237.

Reliance Industries August 2012 futures were at a discount of 0.05 point at 816.75 compared with spot closing of 816.80. The number of contracts traded was 13,269. 

Among Nifty calls, 5500 SP from the August month expiry was the most active call with an addition of 0.26 million open interest.

Among Nifty puts, 5000 SP from the August month expiry was the most active put with contraction of 0.26 million open interest.

The maximum OI outstanding for Calls was at 5500 SP (9.24 mn) and that for Puts was at 5000 SP (10.26 mn).

The respective Support and Resistance levels are: Resistance 5383.51 -- Pivot Point 5370.08 -- Support 5349.51.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.57 for August -month contract.

The top five scrips with highest PCR on OI were Orient Bank 4.00, YES Bank 1.88, UNIPHOS 1.79, M&M 1.77 and PTC 1.75.  

Among the most active underlying, IFCI witnessed an addition of 0.82 million of Open Interest in the August month futures contract followed by RCOM which witnessed contraction of 0.74 million of Open Interest in the near month contract. Meanwhile, JP Associates witnessed contraction of 0.74 million in the August month futures. Also, Bharti Airtel witnessed contraction of 0.08 million in Open Interest in the August month contract. Finally, HDIL witnessed contraction of 0.08 million of Open Interest in the near month futures contract.