Bulls take a breather; Nifty manages to hold 5,400 level

After garnering gain of over a percent in previous session, the domestic index Nifty witnessed consolidation on Wednesday as investors booked their profit at higher levels in the absence of any major trigger. Global cues too remain subdued as most of the Asian markets ended in the negative zone, on the back of wider-than-expected Japan’s trade deficit. The shortfall widened to 517.4 billion yen ($6.5 billion) in July, compared with a revised 60.3 billion yen surplus in June, mainly due to Europe’s sovereign-debt crisis and a slowdown in China. Moreover, European counters also traded in the red as investors weighed up whether signs of progress in the euro zone debt crisis warranted the recent surge. Back home, the sentiments remain dampened after both the houses of Parliament were adjourned for a second consecutive day after the opposition parties created a ruckus over the Comptroller and Auditor General’s report on coal block allocation.

Initially, the domestic index after getting a muted start turned choppy, following subdued trend in Asian counterparts. The benchmark continuously traded choppy and struggled to get back its green terrain till noon trade. The market continuously felt selling pressure due to fall in realty space. The interest rate sensitive realty shares fell on profit booking after recent gains, triggered after data released last week showed that the rate of growth in inflation based on the wholesale price index (WPI) fell to the slowest pace in nearly three years in July 2012, building hopes that the central bank will find more space to ease monetary policy and revive industrial growth. Moreover, power space still felt the impact of CAG report and declined by about 0.80 percent. Private power producers like Tata Power, RPower, Adani Power, GMR Infra and Reliance Infrastructure all edged lower as CAG report said the loss was due to allocation of coal mines to private players. However, in the last leg of trade market witnessed a smart recovery and regained its positive terrain on report that the Finance Ministry approved foreign direct investment in insurance and pension sectors up to 49 percent. The sentiments also strengthened after Airline stocks jumped ahead of meeting of newly-formed United Progressive Alliance (UPA) coordination committee today to discuss foreign direct investment (FDI) in aviation sector. But, the recovery proved short lived as European counters played the spoilsport and Nifty snapped the day’s trade with a marginal cut of about 10 points.

Back home, on NSE sectoral space CNX Infra losing the most, ending with a cut of 1.21 followed by CNX Realty down by 1.09% and CNX Media down by 0.92% while, CNX Pharma up 0.42% and CNX Auto up by 0.25% remained top gainers. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 1.84% and reached 16.00.

The India VIX witnessed contraction of 1.84% at 16.00 as compared to its previous close of at 16.30 on Tuesday.

The 50-share S&P CNX Nifty lost 8.15 points or 0.15% to settle at 5,412.85.

Nifty August 2012 futures closed at 5431.10 on Wednesday at a premium of 18.25 points over spot closing of 5,412.85, while Nifty September 2012 futures were at 5457.70 at a premium of 44.85 points over spot closing. Nifty August futures saw a contraction of 0.25 million (mn) units taking the total outstanding open interest (OI) to 26.13 mn units. The near month August 2012 derivatives contract will expire on Thursday i.e. August 30, 2012.

From the most active contracts, Bharti Airtel August 2012 futures were at a premium of 0.75 points at 249.00 compared with spot closing of 248.25. The number of contracts traded was 13,008.

Tata Motors August 2012 futures were trading at a discount of 0.25 points at 248.05 compared with spot closing of 248.30. The number of contracts traded was 16,588.

Tata Steel August 2012 futures were at a premium of 1.75 point at 394.50 compared with spot closing of 392.75. The number of contracts traded was 12,027.

ICICI Bank August 2012 futures were at a premium of 1.65 points at 975.95 compared with spot closing of 974.30. The number of contracts traded was 16,829.

SBI August 2012 futures were at a premium of 6.25 point at 1918.25 compared with spot closing of 1912.00. The number of contracts traded was 35,963. 

Among Nifty calls, 5500 SP from the August month expiry was the most active call with an addition of 0.16 million open interest.

Among Nifty puts, 5300 SP from the August month expiry was the most active put with an addition of 0.07 million open interest.

The maximum OI outstanding for Calls was at 5500 SP (10.02 mn) and that for Puts was at 5300 SP (10.74 mn).

The respective Support and Resistance levels are: Resistance 5432.53 -- Pivot Point 5413.66 -- Support 5393.98.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.85 for August -month contract.

The top five scrips with highest PCR on OI were Orient Bank 5.00, M&M 2.24, PTC 1.75, Hindunilvr 1.75 and IDFC 1.61. 

Among the most active underlying, IFCI witnessed contraction of 1.63 million of Open Interest in the August month futures contract followed by RCOM which witnessed an addition of 0.64 million of Open Interest in the near month contract. Meanwhile, JP Associates witnessed contraction of 1.19 million in the August month futures. Also, Renuka witnessed an addition of 0.72 million in Open Interest in the August month contract. Finally, HDIL witnessed an addition of 1.66 million of Open Interest in the near month futures contract.