Infosys guidance shocker drags Nifty below 5,700 mark

Pressurized by Infosys guidance shocker combined with bleak global cues, fifty stock index -- Nifty – ended the session below its crucial 5,700 mark with a cut of over half a percent. The sentiments remained dampen throughout the day’s trade and the benchmark lost over 30 points, after IT major Infosys’ sharp cut in earnings outlook soured market sentiment prompting investors to shrug off even better-than-expected factory output growth of August. Global cues too remained lackluster as all the European counters traded in the red in the opening deal tracking weak moves in Asia as investors remain worried about the lingering uncertainty over Spain’s debt crisis. Moreover, Asian markets closed on mixed note as earlier gains post foreboding US jobs figures and hopes for upcoming Chinese economic data were countervailed by global economic worries.

Back home, the Indian equity market made a gap-down start with Nifty breaching its crucial 5,700 bastion on the back of disappointing FY13 outlook reported by IT bellwether Infosys however, the company, on the consolidated basis, posted a rise of 24.29% in its net profit at Rs 2369.00 crore for the quarter ended September 30, 2012 as compared to Rs 1906.00 crore for the same quarter in the previous year. But, in the late morning trade market witnessed some recovery and grabbed the green terrain following better than expected August industrial output. Industrial Production for August came in at 2.7 percent, which was higher than expectations of 0.94 percent while July output was revised to -0.2 percent from 0.1 percent (provisional) earlier. The recovery, afterwards proved short-lived as the same remained bitter for the rate sensitive like banking, realty and auto as it dimmed hopes of rate cut by world’s most aggressive central bank in its upcoming monetary policy review on October 30. Meanwhile, India’s consumer price inflation decelerated slightly in September, but still remained uncomfortably high, maintaining pressure on the central bank to continue with a tight monetary policy. Consumer prices rose 9.73% in September from a year earlier, compared with a 10.03% increase in August. Moreover, the selling got intensified as European market opened on a subdued note. However, the losses remain capped as shares of sugar stocks like Bajaj Hindusthan, Balrampur Chini, Dhampur Sugar and Shree Renuka gained after a government panel recommended scrapping of state control on the marketing of sugar in the country. Some amount of support also came in after HDFC bank reported better than expected Q2 numbers. It reported rise of 30.07% in its net profit at Rs 1559.98 crore for the quarter under review while, gross non-performing assets (NPAs) declined to 0.91% in the July-September quarter as against 1.00% in the same quarter previous year while net NPAs remained same at 0.2%. Finally, Nifty ended the session below its psychological 5,700 mark with a cut of about half a percent.

Meanwhile, most of the sectoral indices on the NSE settled in the negative territory with CNX IT losing the most, ending with a cut of 2.59% followed by CNX Service down by 1.08% and CNX Realty down by 1.07% while, CNX Media up 0.66%  and CNX Pharma up 0.42% remained the top gainer on NSE sectoral space. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, remained unchanged at 16.49.

India VIX, a gauge for markets short term expectation of volatility remained unchanged at 16.49 from its previous closing on Thursday.The 50-share S&P CNX Nifty lost 32.00 points or 0.56% to settle at 5,676.05.

Nifty October 2012 futures closed at 5686.55 on Friday at a premium of 10.50 points over spot closing of 5,676.05, while Nifty November 2012 futures were at 5718.35 at a premium of 42.30 points over spot closing. Nifty October futures saw contraction of 0.49 million (mn) units taking the total outstanding open interest (OI) to 24.87 mn units. The near month October 2012 derivatives contract will expire on October 25, 2012.

From the most active contracts, JP Associates October 2012 futures were trading at a discount of 0.95 at 91.35 compared with spot closing of 92.30. The number of contracts traded was 13,683.

Reliance Communications October 2012 futures were trading at a premium of 0.40 at 62.90 compared with spot closing of 62.50. The number of contracts traded was 13,555.

DLF October 2012 futures were at a premium of 1.50 point at 219.65 compared with spot closing of 218.15. The number of contracts traded was 11,256.

Tata Steel October 2012 futures were at a premium of 1.80 point at 422.20 compared with spot closing of 420.40. The number of contracts traded was 20,042.

HDFC Bank October 2012 futures were at a premium of 3.65 point at 632.85 compared with spot closing of 629.20. The number of contracts traded was 10,431. 

Among Nifty calls, 5800 SP from the October month expiry was the most active call with an addition of 0.75 million open interest.

Among Nifty puts, 5600 SP from the October month expiry was the most active put with contraction of 0.05 million open interest.

The maximum OI outstanding for Calls was at 5800 SP (9.06 mn) and that for Puts was at 5600 SP (6.97 mn).

The respective Support and Resistance levels are: Resistance 5714.25 -- Pivot Point 5686.8 --Support 5648.6.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.92 for October - month contract.

The top five scrips with highest PCR on OI were PNB 1.58, ITC 1.55, Federal Bank 1.25, Maruti 1.00 and HUL 0.98.

Among the most active underlying, IFCI, witnessed contraction of 0.89 million of Open Interest in the October month futures contract followed by JP Associates, which witnessed contraction of 0.49 million of Open Interest in the near month contract. Meanwhile, Unitech witnessed contraction of 3.44 million in the October month futures. Also, RCOM witnessed contraction of 2.38 million in Open Interest in the October month contract. Finally, Shree Renuka Sugars witnessed contraction of 1.04 million of Open Interest in the near month futures contract.