Nifty ends below 5,400 mark on weak global cues

Local benchmark S&P CNX Nifty snapped the day’s trade in the red due to sluggish global cues. Asian shares ended down in dumps today as hopes for a strong policy action from the US Federal Reserve faded and disappointing economic reports on China and the euro zone revived concerns over the faltering global economy. Meanwhile, nervousness of market participants ahead of key meetings of Greece’s prime minister with France and Germany, weighed on European equities. Back home, the sentiments remain subdued as RBI indicated that upside risks to inflation remain due to unsatisfactory monsoon. Moreover, rupee dropped to 55.39/40 against its previous close of 55.26/27, after four sessions of gains, tracking a weaker global risk sentiment.

Earlier, the domestic index made a soft opening tailing weakness in global regional peers. Moreover, the pressure was also felt by the frontline index due to fall in rate sensitive counters like banking, realty and consumer durables. Stock related to these sectors butchered after Reserve Bank of India (RBI) poured cold water on the hopes of rate cuts in upcoming mid-quarterly monetary policy review, in its ‘Annual Report for 2011-12’, a review of the previous fiscal year's macroeconomic conditions and outlook for the current year, stated that ‘lower interest rates alone are unlikely to jump-start the investment cycle.’ Afterwards, market witnessed some recovery in late morning trade but it proved short-lived as index again turned southward following weak opening in European markets. Moreover, selling in metal space too dampened the sentiments and stocks like, Tata Steel, Jindal Steel and Hindalco edged lower after preliminary reading showed that China’s manufacturing may be contracting at a faster pace this month. However, the loss remained limited as some relief came in from FMCG space, which edged higher on reports of revival of monsoon rains this month. Finally, Nifty snapped the day’s trade below its crucial 5,400 level with a cut of over half a percent.

Meanwhile, most of the sectoral indices on the NSE were settled in the red, CNX Realty remained the major loser, down 2.42% followed by Bank Nifty down 1.19% and CNX PSU Bank down 1.16% while CNX FMCG rose 0.18% remained the lone gainer in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, rose 0.25% and reached 16.16.

The India VIX witnessed an addition of 0.25% at 16.16 as compared to its previous close of at 16.12 on Thursday.

The 50-share S&P CNX Nifty lost 28.65 points or 0.53% to settle at 5,386.70.

Nifty August 2012 futures closed at 5402.70 on Friday at a premium of 16.00 points over spot closing of 5,386.70, while Nifty September 2012 futures were at 5428.90 at a premium of 42.20 points over spot closing. Nifty August futures saw a contraction of 0.55 million (mn) units taking the total outstanding open interest (OI) to 25.30 mn units. The near month August 2012 derivatives contract will expire on Thursday i.e. August 30, 2012.

From the most active contracts, IFCI August 2012 futures were at a premium of 0.10 points at 29.35 compared with spot closing of 29.25. The number of contracts traded was 17,936.

Tata Motors August 2012 futures were trading at a premium of 0.45 points at 245.90 compared with spot closing of 245.45. The number of contracts traded was 10,608.

Tata Steel August 2012 futures were at a premium of 0.75 point at 388.25 compared with spot closing of 387.50. The number of contracts traded was 14,661.

Reliance Industries August 2012 futures were at a discount of 0.10 points at 785.10 compared with spot closing of 785.20. The number of contracts traded was 9,201.

ICICI Bank August 2012 futures were at a premium of 4.40 point at 958.15 compared with spot closing of 953.75. The number of contracts traded was 19,550. 

Among Nifty calls, 5500 SP from the August month expiry was the most active call with an addition of 0.43 million open interest.

Among Nifty puts, 5300 SP from the August month expiry was the most active put with an addition of 0.57 million open interest.

The maximum OI outstanding for Calls was at 5500 SP (10.71 mn) and that for Puts was at 5300 SP (10.51 mn).

The respective Support and Resistance levels are: Resistance 5400.56 -- Pivot Point 5385.78 -- Support 5371.91.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.89 for August -month contract.

The top five scrips with highest PCR on OI were Orient Bank 4.00, PTC 1.75, M&M 1.68, IDFC 1.66 and HCL Tech1.49. 

Among the most active underlying, Suzlon witnessed contraction of 8.65 million of Open Interest in the August month futures contract followed by IFCI which witnessed contraction of 6.47 million of Open Interest in the near month contract. Meanwhile, RCOM witnessed contraction of 1.85 million in the August month futures. Also, MTNL witnessed contraction of 2.18 million in Open Interest in the August month contract. Finally, JP Associates witnessed contraction of 1.95 million of Open Interest in the near month futures contract.