Nifty ends flat as CAG reports sours markets mood

Indian benchmark Nifty, after touching its intraday high near crucial 5,400 level, witnessed a vicious fall and closed the session near pre-close level weighed down by a report by the government auditor, which said the country has lost Rs 1.85 lakh crore because coal fields were allotted instead of being auctioned. However, global cues remained firm as European counters opened in the green on hopes of easing Eurozone credit crisis after German Chancellor Angela Merkel's support to ECB President Mario Draghi's announcements in last ECB meet. While, Asian markets closed shutter on a mixed note on Friday.

Initially, the benchmark made a gap-up start tracking sanguine global cues. The market, afterwards, traded jubilantly and touched its intraday high near its crucial 5,400 mark in the early noon trade as sentiments were supported by PSU oil marketing companies, as stocks like BPCL, HPCL and IOC all edged higher on the buzz that government is likely to increase diesel prices by Rs 5 per litre shortly after the Parliament session ends. Also, retail stocks like Provogue India, Brandhouse Retail and Trent provided positive sentiments to the markets after the Commerce and Industry Minister Anand Sharma indicated that the government may announce some decisions on FDI in multi-brand retail and civil aviation, saying all consultations are over and an announcement is likely soon. But, three CAG (Comptroller and Auditor General) reports tabled in parliament in afternoon trade washed out almost all the gains of the market and the index took a U-turn from its day’s high. The CAG report on coal, named many companies including aluminium maker Hindalco, India's biggest private steel producer Tata Steel, power utility major Tata Power and private power producer Jindal Steel and Power (JSPL), which have got the blocks in various states. In a separate report, CAG also named Anil Ambani promoted Reliance Power for unduly benefitting from a government decision allowing the power producer to use surplus coal from its captive block for another project it was not meant for. However, firm trade in European counters helped Nifty to snap the session on a positive note.

Back home, most of the sectoral indices on the NSE were settled in the red, CNX Realty remained the major loser, down 2.02% followed by CNX Metal down 1.61% and CNX Media down by 1.15% while CNX FMCG and CNX IT surged 1.30% and 1.09% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, rose 0.25% and reached 15.73.

The India VIX witnessed an addition of 0.25% at 15.73 as compared to its previous close of at 15.69 on Thursday.

The 50-share S&P CNX Nifty gained 3.35 points or 0.06% to settle at 5,366.30.Nifty August 2012 futures closed at 5382.35 on Friday at a premium of 16.05 points over spot closing of 5,366.30, while Nifty September 2012 futures were at 5409.10 at a premium of 42.80 points over spot closing. Nifty August futures saw contraction of 0.23 million (mn) units taking the total outstanding open interest (OI) to 25.60 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 0.55 points at 240.85 compared with spot closing of 240.30. The number of contracts traded was 16,989.

Reliance Power August 2012 futures were trading at a premium of 0.10 points at 87.80 compared with spot closing of 87.70. The number of contracts traded was 11,097.

Tata Steel August 2012 futures were at a premium of 1.90 point at 396.55 compared with spot closing of 394.65. The number of contracts traded was 13,616.

Reliance Industries August 2012 futures were at a premium of 1.50 points at 816.95 compared with spot closing of 815.45. The number of contracts traded was 9,986.

ICICI Bank August 2012 futures were at a premium of 3.00 point at 964.60 compared with spot closing of 961.60. The number of contracts traded was 13,288. 

Among Nifty calls, 5500 SP from the August month expiry was the most active call with an addition of 0.12 million open interest.

Among Nifty puts, 5000 SP from the August month expiry was the most active put with contraction of 0.14 million open interest.

The maximum OI outstanding for Calls was at 5500 SP (9.36 mn) and that for Puts was at 5000 SP (10.12 mn).

The respective Support and Resistance levels are: Resistance 5396.93 -- Pivot Point 5369.31 -- Support 5338.68.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.58 for August -month contract.

The top five scrips with highest PCR on OI were Orient Bank 4.00, M&M 1.90, UNIPHOS 1.85, PTC 1.75 and YES Bank 1.71. 

Among the most active underlying, IFCI witnessed an addition of 0.76 million of Open Interest in the August month futures contract followed by RCOM which witnessed contraction of 0.01 million of Open Interest in the near month contract. Meanwhile, JP Associates witnessed contraction of 1.46 million in the August month futures. Also, Renuka witnessed an addition of 0.60 million in Open Interest in the August month contract. Finally, HDIL witnessed an addition of 0.82 million of Open Interest in the near month futures contract.