Nifty ends below 5,700 mark on weak global cues

Extending its southward journey for second straight day, S&P CNX Nifty ended the session tumbling below 5,700 level with a huge cut of over seventy points as selling pressure was visible in the heavyweight pockets. Global cues too remain subdued as all the Asian counters shut shop in the red as World Bank slashed its growth forecasts for East Asia, emphasizing worries over the global economic outlook, and caution set in about the coming corporate earnings season. While, European markets also exhibited weak trade in the early deal as investors looked towards a meeting of euro-zone finance ministers for further clues as to whether Spain will request a bailout, while worries about Greece’s next aid tranche also weighed.

Earlier, the market opened almost flat and meandered in a narrow range till mid-day as Finance Minister P Chidambaram tried to soothe the investors’ worries about passing of different FDI bills and said that he will approach the opposition for the same. Some support was also provided by housing finance firms as stocks of companies like Dewan Housing Finance, HDFC, LIC Housing Finance and GIC Housing Finance rallied after the Securities and Exchange Board of India raised the ceiling for investment in debt securities of housing finance companies by debt-oriented mutual funds. But, the selling got intensified following weakness in European counters. The mood of the market however, turned somber with realty and oil & gas continuously putting pressure. Index lost some more ground to end near intraday low as Realty counter tumbled three and half percent, led by over seven percent fall in DLF as social activist Arvind Kejriwal accused the company for favoring Robert Vadra, son-in-law of Congress chief and the UPA Chairperson Sonia Gandhi with easy loans for some undue gains. Oil and Gas space also declined by over two and half a percent, dragged down by RIL, which fell over four and half a percent on downgrade by a global mortgage firm and as petroleum ministry rejected its plea of any immediate revision in gas price before April 2014.  Finally, Nifty ended the session below its crucial 5,700 mark with a cut of over one percent.

Meanwhile, most of the sectoral indices on the NSE settled in the red, CNX Realty remained the major loser, down 3.78% followed by CNX Energy down 2.49% and CNX PSU Bank down by 2.31% while CNX Pharma rose 1.15% remained the lone gainer in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, rose 2.32% and reached 17.17.

The India VIX witnessed an addition of 2.32% at 17.17 as compared to its previous close of at 16.78 on Friday.

The 50-share S&P CNX Nifty lost 70.95 points or 1.23% to settle at 5,676.00.

Nifty October 2012 futures closed at 5701.00 on Monday at a premium of 25.00 points over spot closing of 5,676.00, while Nifty November 2012 futures were at 5732.60 at a premium of 56.60 points over spot closing. Nifty October futures saw contraction of 0.07 million (mn) units taking the total outstanding open interest (OI) to 26.32 mn units. The near month October 2012 derivatives contract will expire on October 25, 2012.

From the most active contracts, Reliance Communications October 2012 futures were trading at a premium of 0.65 at 63.40 compared with spot closing of 62.75. The number of contracts traded was 10,907.

Tata Motors October 2012 futures were trading at a premium of 1.20 at 273.15 compared with spot closing of 271.95. The number of contracts traded was 13,670.

HDIL October 2012 futures were at a discount of 0.10 point at 105.05 compared with spot closing of 105.15. The number of contracts traded was 10,704.

DLF October 2012 futures were at a premium of 2.05 point at 225.90 compared with spot closing of 223.85. The number of contracts traded was 19,746.

Tata Steel October 2012 futures were at a premium of 3.75 point at 410.40 compared with spot closing of 406.65. The number of contracts traded was 27,583.

Among Nifty calls, 6000 SP from the October month expiry was the most active call with an addition of 0.38 million open interest.

Among Nifty puts, 5600 SP from the October month expiry was the most active put with an addition of 0.65 million open interest.

The maximum OI outstanding for Calls was at 6000 SP (7.10 mn) and that for Puts was at 5600 SP (6.09 mn).

The respective Support and Resistance levels are: Resistance 5729.83 -- Pivot Point 5698.02 --Support 5644.18.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.03 for October - month contract.

The top five scrips with highest PCR on OI were Union Bank 1.71, ITC 1.65, PNB 1.04, SBI 1.00 and Mcleodruss 1.00.

Among the most active underlying, IFCI, witnessed contraction of 0.01million of Open Interest in the October month futures contract followed by JP Associates, which witnessed contraction of 2.82 million of Open Interest in the near month contract. Meanwhile, RCOM witnessed an addition of 1.23 million in the October month futures. Also, NHPC witnessed an addition of 3.36 million in Open Interest in the October month contract. Finally, HDIL witnessed contraction of 0.07 million of Open Interest in the near month futures contract.