Nifty ends near day’s low on political worries

Sentiments continued to remain bearish for second consecutive day on Thursday and the fifty stock index -- Nifty -- snapped the day’s trade in the negative territory below its crucial 5,600 mark after political uncertainties took place out of the government’s decision to hike diesel prices and allow overseas investments in multi-brand retail and weak cues from global markets too dampened the sentiments. European counters were trading in the red at this point of time on weak economic data. France manufacturing flash purchasing managers’ index declined to 42.6 in September as against 46 in previous month and even services flash PMI dropped to 46.1 versus 49.2 M-o-M while, all the Asian markets shut-shop in the red amid weak manufacturing data of China, which increased worries over country’s economic condition. China’s preliminary manufacturing PMI came in at 47.8 in September versus 47.6 M-o-M.

Buoyed by weak political jitters, domestic benchmark kick started the session with huge gap-down. Market remained worried over political instability led by the Trinamool Congress (TMC) chief Mamata Banerjee’s decision to withdraw support from UPA government. TMC has been opposing FDI approval in retail sector and hike in diesel price while the government has ruled out the same. But immediately after the dismal opening, the index witnessed some recovery on hopes that the government may get support from Samajwadi party (SP) and Bahujan Samaj party (BSP) to stay in power. Moreover, some amount of strength also came in from public sector oil marketing companies as shares of companies like BPCL, HPCL and IOC all edged higher on the back of continuously fall in international crude prices. However, all valiant efforts of recovery in the late morning trade got flop in late trade as widespread selling pulled the index lower. Selling in Metal space too dampened the sentiments as stocks like Sterlite Industries, Bhushan Steel, JSW Steel, Tata Steel, Sail and Hindalco Industries edged lower following fall in global metal prices. Meanwhile, rupee fell to its lowest in nearly a week on Thursday as a key ally of the country’s ruling coalition withdrew its support. Finally, Nifty snapped the session near the lowest point of the day with a loss of over forty five points.

Meanwhile, most of the sectoral indices on the NSE settled in the negative territory with CNX Metal losing the most, down by 2.27% followed by CNX Infra down by 1.45% and CNX Energy down by 1.43% while, CNX IT and CNX FMCG up by 0.81% and 0.14% respectively. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, rose 4.43% and reached 18.62.

The India VIX witnessed an addition of 0.79% at 18.62 as compared to its previous close of at 17.83 on Tuesday.

The 50-share S&P CNX Nifty lost 45.80 points or 0.82% to settle at 5,554.25.

Nifty September 2012 futures closed at 5571.00 on Thursday at a premium of 16.75 points over spot closing of 5,554.25, while Nifty October 2012 futures were at 5594.75 at a premium of 40.50 points over spot closing. Nifty September futures saw an addition of 0.24 million (mn) units taking the total outstanding open interest (OI) to 21.87 mn units. The near month September 2012 derivatives contract will expire on Thursday i.e. September 27, 2012.

From the most active contracts, JP Associates September 2012 futures were trading at a premium of 0.55 at 78.50 compared with spot closing of 77.95. The number of contracts traded was 9,698.

Tata Motors September 2012 futures were trading at a premium of 1.40 at 272.40 compared with spot closing of 271.00. The number of contracts traded was 18,506.

DLF September 2012 futures were at a premium of 0.80 point at 229.95 compared with spot closing of 229.15. The number of contracts traded was 12,659.

BHEL September 2012 futures were at a premium of 1.15 point at 216.55 compared with spot closing of 215.40. The number of contracts traded was 10,370.

Tata Steel September 2012 futures were at a premium of 1.50 point at 394.10 compared with spot closing of 392.60. The number of contracts traded was 13,166. 

Among Nifty calls, 5700 SP from the September month expiry was the most active call with  an addition  of 0.25 million open interest.

Among Nifty puts, 5400 SP from the September month expiry was the most active put with an addition of 0.22 million open interest.

The maximum OI outstanding for Calls was at 5700 SP (7.32 mn) and that for Puts was at 5400 SP (8.05 mn).

The respective Support and Resistance levels are: Resistance 5578.76 -- Pivot Point 5556.83 --Support 5532.31.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.52 for September-month contract.

The top five scrips with highest PCR on OI were India Info 5.33, Mphasis 3.00, CESC 2.67, Jindal Steel 2.07, and Bharat Forg 1.67.

Among the most active underlying, IFCI witnessed contraction of 1.77 million of Open Interest in the September month futures contract followed by JP Associates, which witnessed contraction of 1.37 million of Open Interest in the near month contract. Meanwhile, RCOM witnessed contraction of 0.10 million in the September month futures. Also, Renuka witnessed contraction of 1.08 million in Open Interest in the September month contract. Finally, Tata Motors witnessed an addition of 0.12 million of Open Interest in the near month futures contract.