Nifty slips to its three months low ahead of the May series expiry

A day ahead of the F&O May series expiry the benchmark index of NSE- S&P CNX Nifty- slipped below its crucial support level of 5,350. It was one way slide that gripped the markets from the very beginning, taking the index to its lowest point of the day in the mid afternoon session.  Selling became intensified and plunge in the heavyweights led the markets lower. Global concern coupled with domestic inflation and rising interest worries was clearly evident in today’s trade. Concern about the euro zone's debt troubles and talk of a possible slowdown in the US took the center stage. Though, the commodity stocks were higher in US trade after a bullish forecast by Morgan Stanly but in local markets they too swayed with other components. Barring consumer durable sector, none of the gauges were able to pose any resistance to the downfall; there was no support from either the global or domestic front, the index southward journey halted to a new three months low. It was some last hour bottom fishing that pulled the markets out of the low points of the day, but still lower by around a percent.

On the sectoral front, CNX IT lost the most closing lower by 1.53%, followed by CNX Infra down by 1.16%, CNX Realty down by 1.07% and Bank Nifty losing 0.67%. Though, the broader indices too closed in red but they were in comparatively better position than their larger peers. The global cues too remained somber and barring few of the other Asian indices rest closed in red, while the European markets too were trading lower in the early part of the trade.

The India VIX added 3.66% at 20.66 on Wednesday as compared to its previous close of 19.93 on Tuesday.  

The 50-share S&P CNX Nifty lost 45.90 points or 0.85% and settled at 5,348.95.

Nifty May 2011 futures closed at 5,348.00, at a discount of 0.95 points over spot closing of 5,348.95, while Nifty June 2011 futures were at 5,342.05 at a discount of 6.90 points over spot closing. The near month May 2011 derivatives contract expires on Thursday, May 26, 2011.Nifty May futures saw addition of 19.06% or 3.96 million (mn) units, taking the total outstanding open interest (OI) to 24.75 mn units.

From the most active underlying, SBI’s May 2011 futures closed at a premium of 6.20 points at 2175.00 compared with spot closing of 2168.80. The number of contracts traded was 38,241.

SBI’s June 2011 futures were at a premium of 20.65 point at 2189.45 compared with spot closing of 2168.80. The number of contracts traded was 21,876.

Infosys May 2011 futures were at a discount of 13.50 points at 2780.50 compared with spot closing of 2794.00. The number of contracts traded was 16,238.

Tata Steel May 2011 futures were at a premium of 0.95 at 562.05 compared with spot closing of 561.10. The number of contracts traded was 19,293.

ICICI Bank May 2011 futures were at a premium of 1.60 points at 1013.10 compared with spot closing of 1011.50. The number of contracts traded was 21,128.

For Nifty calls, 5400 strike price (SP) from the May series was the most active call with a contraction of 0.79 million or 12.01%.

Among Nifty puts, 5300 SP from the May month expiry was the most active put with a contraction of  0.70 million or 8.78%.

The maximum Call OI outstanding was at 5400 SP (7.34 mn) and that for Puts at 5300 SP (8.71mn).

The respective Support and Resistance levels are: Resistance 5382.46-- Pivot Point 5355.58-- Support 5322.06.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.58 for May-month contract.

The top five scrips with highest PCR on OI were Bharat Forge-10.00, Jindal Steel- 2, Mphasis- 2,  Grasim Industries- 1.85 and  BRFL-1.53.

Among most active underlying State Bank of India (SBI) witnessed an addition of 0.06 % in the May month futures contract, followed by Tata Steel which gained 9.93% of Open Interest (OI) in the near month contract. Meanwhile, DLF too witnessed an addition of 2.15% in this month futures coupled with L&T which declined 4.04% in the May month future contract. Lastly,  Reliance Industries saw a contraction of 5.71% in its OI in the May month futures contract.