Nifty closes flat ahead of IIP, inflation data

Trading listlessly, the local benchmark Nifty closed flat as investors opted a cautious approach after recent gains of over two and a half percent in previous two sessions ahead of the IIP and inflation data to be released later this week. Moreover, lack of major direction ahead of some global as well as domestic economic events this week mainly kept the market in tight range. Cues from global markets too remained mixed as European indices traded flat in morning deals amid concern about slowdown in top economies such as the US, China and Japan while, Asian markets ended mixed on the back of weak data from China and the United States which raised hopes for new stimulus measures ahead of Federal Reserve meeting. Moreover, all eyes will now be on the two-day FOMC policy meeting that begins on September 12, 2012.

Early in the morning, the index opened on a positive note but, as the day progressed it pared all its gains as investor preferred cashing profits on receding fiscal reforms hope after oil Minister S. Jaipal Reddy said on Friday that India has no immediate plan to raise domestic fuel prices. Afterwards, market tried many times to gain strength but, every times profit booking at higher levels pulled it down. Meanwhile, metal stocks provided strength to the domestic market as shares like NMDC, Hindalco, Sail, Tata Steel, JSW Steel and Sterlite Industries edged higher as LMEX, a gauge of six metals traded on the London Metal Exchange, jumped 3.01 percent on September 7, 2012. Moreover, traders also remained cautious ahead of August headline inflation figure slated to be released on September 14, 2012 and finally Nifty snapped the day’s trade mostly unchanged.

Meanwhile, most of the sectoral indices on the NSE settled in the green, CNX Pharma remained the major gainer, up 0.89% followed by CNX Metal up 0.72% and CNX Auto up by 0.55% while CNX PSU Bank and CNX Media declined by 1.07% and 0.93% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 3.46% and reached 15.27.

The India VIX witnessed an addition of 3.46% at 15.27 as compared to its previous close of at 15.26 on Friday.

The 50-share S&P CNX Nifty gained 4.75 points or 0.09% to settle at 5,363.45.

Nifty September 2012 futures closed at 5371.65 on Monday at a premium of 8.20 points over spot closing of 5,363.45, while Nifty October 2012 futures were at 5399.35 at a premium of 35.90 points over spot closing. Nifty September futures saw an contraction of 1.71 million (mn) units taking the total outstanding open interest (OI) to 17.02 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 trading at a premium of 0.90 at 249.25 compared with spot closing of 248.35. The number of contracts traded was 13,346.

BHEL September 2012 futures were trading at a premium of 1.25 points at 199.05 compared with spot closing of 197.80. The number of contracts traded was 10,593.

Tata Steel September 2012 futures were at a premium of 1.95 point at 380.55 compared with spot closing of 378.60. The number of contracts traded was 16,141.

ICICI Bank September 2012 futures were at a premium of 4.05 points at 936.05 compared with spot closing of 932.00. The number of contracts traded was 12,469.

SBI September 2012 futures were at a premium of 8.55 point at 1866.55 compared with spot closing of 1858.00. The number of contracts traded was 24,005. Among Nifty calls, 5600 SP from the September month expiry was the most active call with an addition of 0.36 million open interest.

Among Nifty puts, 5200 SP from the September month expiry was the most active put with an addition of 0.25 million open interest.

The maximum OI outstanding for Calls was at 5600 SP (7.09 mn) and that for Puts was at 5200 SP (8.04 mn).

The respective Support and Resistance levels are: Resistance 5376.23 -- Pivot Point 5362.66 --Support 5349.88.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.06 for September-month contract.

The top five scrips with highest PCR on OI were Federal Bank 3.00, Bharat Forg 2.00, KTK Bank 2.00, Grasim1.27, and LT 1.08.

Among the most active underlying, IFCI witnessed contraction of 1.12 million of Open Interest in the September month futures contract followed by RCOM which witnessed an addition of 2.89 million of Open Interest in the near month contract. Meanwhile, JP Associaties witnessed contraction of 0.83 million in the September month futures. Also, HDIL witnessed contraction of 3.18 million in Open Interest in the September month contract. Finally, Hindalco witnessed contraction of 1.67 million of Open Interest in the near month futures contract.