Nifty ends at 1-month low; Banking, Metal stocks weigh

The domestic index S&P CNX Nifty snapped the session below its crucial 5,250 bastion for the first time since August 3, 2012 as the government struggled to implement promised reforms amid stiff resistance from allies and opposition parties. On the global front, Asian markets extended losses and ended lower on Wednesday tracking losses in Europe and on Wall Street after a third straight monthly contraction in US manufacturing activity while, European counters too traded lower in the opening deal as investors traded nervously ahead of a European Central Bank meeting and a US jobs report. Back home, sentiments also remain dampened due to sharp cut in the rupee, which hit a three-week low against the dollar on Wednesday.

Indian equity market made a gap-down opening as investors booked their profits recorded in the previous session amid a weak trend in Asian peers. But, market held its crucial 5,250 mark till late morning session as some amount of support was provided by FMCG sector, which rose over half a percent on hopes that the revival of monsoon rains across the country would help improve farm income aiding growth in rural spends. In the noon trade, selling got intensified and market lost its crucial 5,250 mark after banking shares witnessed profit taking at higher levels on concerns of rising non-performing assets in the wake of sluggish economy and government’s reduced fiscal flexibility. The sentiments also got bashed by Metal space, which lost the most by about three percent on rising concerns of demand slowdown in the wake of sluggish economy both local and global. Stocks of Tata Steel, Hindalco, Jindal Steel & Power, Sesa Goa, Sterlite Industries all corrected by 2.50-5 percent. Meanwhile, Auto stocks like Tata Motors, M&M and Bajaj Auto traded lower on report that the prices of petrol, diesel and LPG may be increased next week after Finance Ministry told the Petroleum Ministry that it has no funds left to subsidize fuels. Finally, Nifty ended the session near its intraday low with a cut of about a percentage point.

Meanwhile, most of the sectoral indices on the NSE were settled in the red, CNX Metal remained the major loser, down 2.48% followed by CNX PSU Bank down 2.10% and Bank Nifty down by 1.92% while CNX Media and CNX FMCG surged 1.09% and 0.67% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 2.56% and reached 17.01.

The India VIX witnessed an addition of 2.53% at 17.01 as compared to its previous close of at 16.59 on Tuesday.

The 50-share S&P CNX Nifty lost 48.30 points or 0.92% to settle at 5,225.70.

Nifty September 2012 futures closed at 5253.35 on Wednesday at a premium of 27.65 points over spot closing of 5,225.70, while Nifty October 2012 futures were at 5282.05 at a premium of 56.35 points over spot closing. Nifty September futures saw contraction of 0.17 million (mn) units taking the total outstanding open interest (OI) to 18.75 mn units. The near month September 2012 derivatives contract will expire on Thursday i.e. September 27, 2012.

From the most active contracts, Tata Motors September 2012 futures were at a premium of 1.20 points at 229.90 compared with spot closing of 228.70. The number of contracts traded was 11,901.

Bharti Airtel September 2012 futures were trading at a premium of 2.10 points at 258.75 compared with spot closing of 256.65. The number of contracts traded was 10,732.

BHEL September 2012 futures were at a discount of 1.85 point at 205.35 compared with spot closing of 207.20. The number of contracts traded was 9,196.

Tata Steel September 2012 futures were at a premium of 3.30 points at 352.10 compared with spot closing of 348.80. The number of contracts traded was 17,600.

United Spirits September 2012 futures were at a premium of 7.90 point at 1017.90 compared with spot closing of 1010.00. The number of contracts traded was 8,899.

Among Nifty calls, 5500 SP from the September month expiry was the most active call with an addition of 0.10 million open interest.

Among Nifty puts, 5200 SP from the September month expiry was the most active put with an addition of 0.32 million open interest.

The maximum OI outstanding for Calls was at 5500 SP (7.30 mn) and that for Puts was at 5200 SP (6.91 mn).

The respective Support and Resistance levels are: Resistance 5251.56 -- Pivot Point 5233.63 --Support 5207.76.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.97 for September-month contract.

The top five scrips with highest PCR on OI were Welcorp 40.00, ON Mobile 2.94, ABB 2.00, Bharat Forg 2.00, and Vipind 1.50.

Among the most active underlying, IFCI witnessed an addition of 0.25 million of Open Interest in the September month futures contract followed by Jaiprakash Associates which witnessed contraction of 0.04 million of Open Interest in the near month contract. Meanwhile, RCOM witnessed an addition of 0.05 million in the September month futures. Also, Hindalco witnessed an addition of 1.33 million in Open Interest in the September month contract. Finally, HDIL witnessed contraction of 0.30 million of Open Interest in the near month futures contract.