Nifty ends marginally lower ahead of derivatives expiry

S&P CNX Nifty continued to witness consolidation as investors stayed sideways a day ahead of the expiry of monthly derivative contracts. Sentiment mainly remain dampened by weak global stock markets after Federal Reserve said the third round of bond buying may fail to stimulate economic growth. Asian markets ended mostly in red on Wednesday with Nikkei tumbled over two percent, breaking below the key 9,000 level, as a mass of companies went ex-dividend. Meanwhile, Seoul closed with red mark on growth worries. European counters too traded in the red in opening session with stocks in Spain leading the fall, as anti-austerity protests in Spain served as a reminder of impediments faced by the region's leaders in quelling the debt crisis.

Earlier, the benchmark started off trade in the red as selling pressure emerged as investors indulged in squaring up their positions created in recent rally ahead of the settlement in September month contract in the derivatives segment on Sept 27. However, the market gained some strength in the mid morning trade as investors got some respite from Chief Economic Advisor Raghuram Rajan’s statement that India’s recent reforms measures has changed international perception about the country for the better and is likely to reverse the downward trajectory of economic growth and could help avert a credit ratings downgrade. But, market lost its ground in mid noon trade breaching its crucial 5,650 mark following choppiness in European counters. Moreover, fall in telecom stocks too dampened the sentiments as scrips like Bharti Airtel, RCom and Idea Cellular fell sharply as competitiveness in the sector is expected to increase with the widely expected entry of Reliance Industries into the sector. Market regained its strength in the final hour of trade and recovered some lost ground supported by renewed buying in FMCG space, which rose around a percent on favourable outlook for Rabi or winter crops due to the moisture available in the soil following wide-spread rains in August and September. However, the recovery was not enough to pull the frontline indices back into the positive terrain. Finally, Nifty managed to hold its crucial 5,650 mark and ended the session with a marginal loss of just ten points.

Meanwhile, most of the sectoral indices on the NSE were settled in the red, CNX Metal remained the major gainer, down 1.29% followed by CNX Infra down 0.83% and CNX Auto down by 0.36% while CNX PSU Bank and CNX FMCG rose 0.85% and 0.74% remained the top gainers in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 0.82% and reached 16.97.

The India VIX witnessed contraction of 0.82% at 16.97 as compared to its previous close of at 17.11 on Tuesday.

The 50-share S&P CNX Nifty lost 10.45 points or 0.18% to settle at 5,663.45.

Nifty September 2012 futures closed at 5669.85 on Wednesday at a premium of 6.40 points over spot closing of 5,663.45, while Nifty October 2012 futures were at 5696.75 at a premium of 33.30 points over spot closing. Nifty September futures saw contraction of 3.57 million (mn) units taking the total outstanding open interest (OI) to 15.62 mn units. The near month September 2012 derivatives contract will expire on Thursday i.e. September 27, 2012.

From the most active contracts, Tata Steel October 2012 futures were trading at a premium of 4.15 at 398.75 compared with spot closing of 394.60. The number of contracts traded was 15,180.

ICICI Bank October 2012 futures were trading at a premium of 6.50 at 1070.90 compared with spot closing of 1064.40. The number of contracts traded was 14,843.

BHEL September 2012 futures were at a premium of 0.05 point at 253.30 compared with spot closing of 253.25. The number of contracts traded was 15,836.

Tata Steel September 2012 futures were at a premium of 2.50 point at 397.10 compared with spot closing of 394.60. The number of contracts traded was 19,783.

ICICI Bank September 2012 futures were at a premium of 1.25 point at 1065.65 compared with spot closing of 1064.40. The number of contracts traded was 19,355. 

Among Nifty calls, 5800 SP from the September month expiry was the most active call with contraction of 0.32 million open interest.

Among Nifty puts, 5600 SP from the September month expiry was the most active put with  an addition of 0.89 million open interest.

The maximum OI outstanding for Calls was at 5800 SP (8.63 mn) and that for Puts was at 5600 SP (8.60mn).

The respective Support and Resistance levels are: Resistance 5677.95 -- Pivot Point 5658.3 --Support 5643.8.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.64 for September-month contract.

The top five scrips with highest PCR on OI were India Infoline 5.33, JP Power 3.00, Mphasis 3.00, Bhusan Steel 3.00, and CESC 2.78.

Among the most active underlying, IFCI witnessed contraction of 11.07 million of Open Interest in the September month futures contract followed by JP Associates, which witnessed contraction of 6.48 million of Open Interest in the near month contract. Meanwhile, RCOM witnessed contraction of 10.42 million in the September month futures. Also, Shree Renuka Sugars witnessed contraction of 11.88 million in Open Interest in the September month contract. Finally, Tata Motors witnessed contraction of 4.12 million of Open Interest in the near month futures contract.