Nifty ends volatile session on flat note; holds 5,650 mark

Erasing almost its morning gains, S&P CNX Nifty snapped the session on a flat note as investors’ opted cautious approach ahead of Reserve Bank of India’s (RBI) policy review on Oct 30. Subdued cues from global markets damaged the sentiments as most of the Asian stock markets ended mostly lower on Monday as better-than-expected US growth data were unable to offset concerns over corporate earnings. Moreover, European counters too were trading in the red following a string of disappointing corporate earnings last week and a bleak outlook. UBS, a Swiss global financial services company will be in the spotlight on the buzz that Swiss Bank is expected to cut up to 10,000 jobs, or 16 percent of its workforce, in what would be one of the largest layoffs by a bank since the financial crisis. Back home, depreciation in Indian rupee against dollar too dampened the sentiments. The Indian rupee lost 47 paise to 54.03 against the US dollar at the time of closing of equity markets.

Initially, market exhibited great traction with Nifty notching almost its crucial 5,700 mark in morning trade following the reshuffle of cabinet ministers on Oct 28. In the biggest reshuffle of the Congress-led United Progressive Alliance Cabinet, Manmohan Singh inducted 17 new faces and a total of 22 ministers giving several new and young faces a chance to prove their mettle. The sentiments also got some support after Oil and gas sector garnered over half percent gain on hopes for improved relationship with the government after the appointment of Veerappa Moily as the new Petroleum and Natural Gas Minister on Oct 28. Afterwards, in the second half, market turned in the red as investors took profit off the table as finance minister’s fiscal consolidation roadmap proved as non event as nothing out of the blue was announced. In an effort to prevent the country’s credit rating being downgraded to junk status, FM said that the government will work towards restricting fiscal deficit in the current financial year to 5.3 per cent of the gross domestic product (GDP), i.e., higher than the budgeted fiscal deficit for the current fiscal at 5.1 percent of GDP) and further trimming it down to 3 per cent by 2016-17. The selling got intensified and market breached its crucial 5,650 mark as European markets exhibited dead beat in the early session. The sentiments also got clobbered after capital goods pack tumbled over one and a half percent after the sectoral heavyweight BHEL dipped 6 percent on reporting a lower-than-expected net profit of Rs 1,274 crore as compared to analyst estimates of around Rs 1,418 crore for the second quarter ended September 2012 (Q2). However, some amount of traction was witnessed in the late trade which helped the frontline index to get back its crucial 5,650 mark and Nifty, ended the session tad above its pre-close level.

Meanwhile, most of the sectoral indices on the NSE were settled in the red, CNX Media remained the major loser, down 1.82% followed by CNX PSE down 0.91% and CNX Realty down by 0.84% while CNX Energy and CNX Pharma rose 0.68% and 0.50% remained the top gainers in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 6.40% and reached 15.12.

The India VIX witnessed an addition of 6.40% at 15.12 as compared to its previous close of at 14.21 on Friday.

The 50-share S&P CNX Nifty gained 1.30 points or 0.02% to settle at 5,665.60.

Nifty November 2012 futures closed at 5702.10 on Monday at a premium of 36.50 points over spot closing of 5,665.60, while Nifty December 2012 futures ended at 5733.45, at a premium of 67.85 points over spot closing. Nifty November futures saw contraction of 0.16 million (mn) units taking the total outstanding open interest (OI) to 17.82 mn units. The near month November 2012 derivatives contract will expire on November 29, 2012.

From the most active contracts, SBI November 2012 futures were trading at a premium of 20.55 at 2184.25 compared with spot closing of 2,163.70. The number of contracts traded was 32,246.

BHEL November 2012 futures were trading at a premium of 0.95 at 227.45 compared with spot closing of 226.50. The number of contracts traded was 23,563.

ICICI Bank November 2012 futures were at a premium of 9.90 point at 1077.90 compared with spot closing of 1,068.00. The number of contracts traded was 17,264.

Bank of India November 2012 futures were at a premium of 2.00 point at 281.40 compared with spot closing of 279.40. The number of contracts traded was 14,182.

Reliance Industries November 2012 futures were at a premium of 5.10 point at 816.00 compared with spot closing of 810.90. The number of contracts traded was 10,989.

Among Nifty calls, 6000 SP from the November month expiry was the most active call with an addition of 0.66 million open interest.

Among Nifty puts, 5300 SP from the November month expiry was the most active put with an addition of 0.54 million open interest.

The maximum OI outstanding for Calls was at 6000 SP (4.36 mn) and that for Puts was at 5300 SP (4.89 mn).

The respective Support and Resistance levels are: Resistance 5694.23 -- Pivot Point 5669.67 -- Support 5641.03.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.16 for November -month contract.

The top five scrips with highest PCR on OI were Tata Communications 4.00, Mphasis 2.00, Raymond1.29, Adani Power 1.25 and Hero Moto Co 1.25.

Among most active underlying, JP Associates witnessed contraction of 3.07 million of Open Interest in the November month futures contract followed by RCOM which witnessed an addition of 0.36 million of Open Interest in the near month contract. Meanwhile, Shree Renuka Sugar witnessed an addition of 2.60 million in the November month futures. Also, Hindalco witnessed contraction of 0.27 million in Open Interest in the November month c ontract. Finally, Tata Motors witnessed an addition of 0.64 million of Open Interest in the near month futures contract.