Nifty closes lower ahead of October F&O expiry

Erasing the previous session’s gains, S&P CNX Nifty ended the trade below its crucial 5,700 level with a cut of about half a percent on selling witnessed in metal, software and FMCG space as on the penultimate day of F&O October series expiry as tomorrow being a holiday on account of Dussehra. Weakness in global markets too weighed down the sentiments as most of the Asian counters shut shop in the red as investors remained cautious after global shares faltered overnight on weak earnings reports. Seoul shares slipped ahead of quarterly results from domestic blue chip stocks, while Chinese shares went home with red mark as investors await a turnaround in the domestic economy. Moreover, European counters were trading in the red at this point of time as third quarter results presented a mixed picture, hitting a one-week low that analysts said might encourage some investors back into the market.

Back home, Indian benchmark got back its green terrain, after a slightly lower opening, supported by buying in PSU stocks, which moved higher ahead of the chiefs of PSUs meet with the Prime Minister, they are expected to highlight interference by their administrative ministries in the meeting. Afterwards market started crawling southward as some amount of pressure came in from Metal, which dropped near a percent after copper prices slipped in the global market on Tuesday as investors played safe ahead of a US Federal Reserve policy meeting. Moreover, depreciation in rupee too dampened the sentiments. The selling got intensified and the index breached its crucial 5,700 mark in mid noon trade tracking weakness in European markets. Sentiments also got hammered after rate sensitives banking and realty space ended lower as Reserve Bank of India (RBI) is unlikely to take any key policy measures in its upcoming policy meet on October 30, 2012 as inflation remains sticky. However, the losses remain capped supported by some good second quarter earnings. Idea Cellular, on consolidated basis, reported 126.97% rise in its net profit after tax at Rs 240.04 crore for the quarter ended September 30, 2012 as compared to Rs 105.76 crore for the same quarter in the previous year. Moreover, Cairn India too beat the street expectation, on consolidated basis, posted a rise of 204.34% in its net profit after tax at Rs 2322.18 crore for the quarter ended September 30, 2012 as compared to Rs 763.03 crore for the same quarter in the previous year. Finally, Nifty snapped the session below its crucial 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 Metal losing the most, ending with a cut of 0.84% followed by CNX IT down by 0.81% and CNX FMCG down by 0.77% while, CNX Infra up 0.09% remained the lone gainer on NSE sectoral space. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 5.14% and reached 13.71.

The India VIX witnessed an addition of 5.14% at 13.71 as compared to its previous close of at 13.04 on Monday.

The 50-share S&P CNX Nifty lost 25.75 points or 0.45% to settle at 5,691.40.

Nifty October 2012 futures closed at 5695.50 on Tuesday at a premium of 4.10 points over spot closing of 5,691.40, while Nifty November 2012 futures were at 5733.45 at a premium of 42.05 points over spot closing. Nifty October futures saw contraction of 5.79 million (mn) units taking the total outstanding open interest (OI) to 13.93 mn units. The near month October 2012 derivatives contract will expire on October 25, 2012.

From the most active contracts, BHEL October 2012 futures were trading at a premium of 0.55 at 240.05 compared with spot closing of 239.50. The number of contracts traded was 14,957.

Tata Steel November 2012 futures were trading at a premium of 2.55 at 407.45 compared with spot closing of 404.90. The number of contracts traded was 15,471.

Tata Steel October 2012 futures were at a premium of 0.50 point at 405.40 compared with spot closing of 404.90. The number of contracts traded was 17,908.

ICICI Bank November 2012 futures were at a premium of 7.95 point at 1087.75 compared with spot closing of 1079.80. The number of contracts traded was 16,006.

ICICI Bank October 2012 futures were at a premium of 0.45 point at 1080.25 compared with spot closing of 1079.80. The number of contracts traded was 21,705.

Among Nifty calls, 5700 SP from the October month expiry was the most active call with contraction of 0.75 million open interest. 

Among Nifty puts, 5700 SP from the October month expiry was the most active put with contraction of 1.35 million open interest.

The maximum OI outstanding for Calls was at 5700 SP (4.53 mn) and that for Puts was at 5700 SP (4.89 mn).

The respective Support and Resistance levels are: Resistance 5714.31 -- Pivot Point 5697.88 -- Support 5674.96.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.96 for October -month contract.

The top five scrips with highest PCR on OI were Axis Bank 2.47, Aditya Birla Nuvo 1.67, PNB 1.37, ITC 1.36 and HCL Tech 1.33.

Among most active underlying, Suzlon witnessed contraction of 24.86 million of Open Interest in the October month futures contract followed by Unitech which witnessed contraction of 14.14 million of Open Interest in the near month contract. Meanwhile IFCI witnessed contraction of 15.88 million in the October month futures. Also, JP Associates witnessed contraction of 14.47 million in Open Interest in the October month contract. Finally, Reliance Communications witnessed contraction of 12.70 million of Open Interest in the near month futures contract.