Nifty ends below 5,650 level on profit booking in heavyweights

Erasing the initial session’s gains, S&P CNX Nifty ended the session below its crucial 5,650 level with a cut of over half a percent on heavy selling in heavyweights like Reliance Industries, M&M, ACC and Tata Steel. However, investors overlooked supportive global cues as most of the Asian counters ended the session in the positive terrain as investors sentiment improved on the back of an overnight rally in US stocks that was fuelled by better than expected earnings from Citigroup Inc, the third-largest US bank, and above forecast retail sales data. Meanwhile, the European markets were trading marginally higher as investors were buoyed by the latest batch of US data and earnings. Moreover, investors also remained hopeful that a meeting of European leaders later in the week can advance plans to tackle Spain and Greece's debts.

Back home, the market opened on a positive note tracking supportive global cues and in-line results announced by Reliance Industries and Axis Bank on Monday. However, profit booking at the highs saw the index trimming its gains and remaining range-bound in the morning session. The losses intensified in noon trade despite firm opening in European counters. Selling pressure in capital goods, oil & gas, metal and fast moving consumer goods stocks pushed the market into negative in the late trade. The market continued its southward journey till end and touched its intraday low as rate sensitive like banking, auto and realty clobbered out off shape as higher than expected September inflation numbers dimmed the rate cut hope in upcoming monetary policy review by Reserve Bank of India (RBI) on October 30, 2012. Meanwhile, investors also remained concern over political worries as the Opposition parties stepped up pressure on the government for an independent inquiry into the land deal between Congress chief Sonia Gandhi's son-in-law Robert Vadra and realty major DLF. Moreover, some amount of denting also came in after the rupee once again weakened and was trading near 53 mark versus dollar at the time of equity market closing. Finally, Nifty ended the session below its psychological 5,650 level, near its intraday low, with a cut of about forty points.

Meanwhile, most of the sectoral indices on the NSE settled in the negative territory with CNX Realty losing the most, ending with a cut of 3.24% followed by CNX Metal down by 1.70% and CNX PSU Bank down by 1.68% while, CNX Media up 0.85% remained the lone gainer on NSE sectoral space. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 2.08% and reached 15.57.

India VIX, a gauge for markets short term expectation of volatility lost 2.08% at 15.57 from its previous close of 15.90 on Monday .

The 50-share S&P CNX Nifty lost 39.25 points or 0.69% to settle at 5,648.00.

Nifty October 2012 futures closed at 5651.55 on Tuesday at a premium of 3.55 points over spot closing of 5,648.00, while Nifty November 2012 futures were at 5681.45 at a premium of 33.45 points over spot closing. Nifty October futures saw contraction of 0.57 million (mn) units taking the total outstanding open interest (OI) to 24.03 mn units. The near month October 2012 derivatives contract will expire on October 25, 2012.

From the most active contracts, Jaiprakash Associates October 2012 futures were trading at a discount of 1.00 at 89.10 compared with spot closing of 90.10. The number of contracts traded was 12,382.

Tata Motors October 2012 futures were trading at a discount of 0.70 at 262.20 compared with spot closing of 262.90. The number of contracts traded was 12,797.

Karnataka Bank October 2012 futures were at a discount of 0.30 point at 122.85 compared with spot closing of 123.15. The number of contracts traded was 8,525.

DLF October 2012 futures were at a premium of 0.85 point at 208.55 compared with spot closing of 207.70. The number of contracts traded was 13,457.

Reliance industries October 2012 futures were at a premium of 5.30 point at 815.30 compared with spot closing of 810.00. The number of contracts traded was 16,064.

Among Nifty calls, 5800 SP from the October month expiry was the most active call with an addition of 0.87 million open interest.

Among Nifty puts, 5600 SP from the October month expiry was the most active put with an addition  of 0.03 million open interest.

The maximum OI outstanding for Calls was at 5800 SP (10.05mn) and that for Puts was at 5600 SP (7.72mn).

The respective Support and Resistance levels are: Resistance 5787.86 -- Pivot Point 5661.73 --Support 5609.46.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.88 for October - month contract.

The top five scrips with highest PCR on OI were ITC 1.55, PNB 1.51, AXIS Bank 1.02, ABB 1.00 and HUL 0.99.

Among the most active underlying, IFCI, witnessed contraction of 0.41 million of Open Interest in the October month futures contract followed by Unitech which witnessed contraction of 2.40 million of Open Interest in the near month contract. Meanwhile, Jaiprakash Associates witnessed contraction of 1.06 million in the October month futures. Also, RCOM witnessed contraction of 5.08 million in Open Interest in the October month contract. Finally, Shree Renuka Sugars witnessed an addition of 0.73 million of Open Interest in the near month futures contract.