Subdued European cues drag Nifty lower

Nifty ended the choppy day of trade in red with cut of over a percent on the back of weak cues from global equity indices. European finance heads failed to agree a plan to solve the region’s debt woes, while they also put off a decision on releasing rescue funds to Greece. Earlier, the Indian equity market made a weak start as investors booked their profits recorded in the previous three sessions amid a feeble trend in other Asian markets. Moreover, sentiments remained dampened as Capital goods stocks viz., Larsen & Toubro, BHEL, Crompton Greave, Punj Lloyd, Siemens edged lower in the trade on worries that higher interest rates could affect capital expenditure plans of Indian firms. The index continued to trade in the tight range till late morning session as selling pressure persisted in banking and infra stocks. In the noon trade, the domestic index lost more ground as selling intensified after European counterparts opened on a subdued note. Meanwhile, shares of two-wheeler makers like TVS motors and Bajaj Auto declined on fears the latest hike in petrol prices may adversely impact sales during the festive season, while, Metal stocks fell as metal prices declined on the London Metal Exchange on Friday, September 16, 2011 too dampened the sentiments. Afterwards, benchmark traded in the tight range till end as no positive trigger were there in the market. Finally, Nifty ended the sluggish day of trade with a cut of over a percentage point.

On the global front, the US markets kept gaining for the entire passing week, their longest gaining streak in last two months, while all the Asian equity indices finished the day’s trade on subdued. Moreover, all the European counterparts were trading in the red where major indices like CAC and DAX were trading with a cut of over two percent at this point of time. Back home, all the sectoral indices on the NSE settled in the negative territory with Bank Nifty losing the most, ending with a cut of 1.41% followed by CNX PSU Bank down by 1.41%, and CNX Infra down by 1.30% in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 4.04% and reached 29.60, while S&P Nifty dropped by 52.30 points or 1.03% to close at 5,031.95.

The India VIX increased by 4.04% at 29.60 as compared to its previous close of 28.45 on Friday.

The 50-share S&P CNX Nifty lost 52.30 points or 1.03% and settled at 5,031.95.

Nifty September 2011 futures closed at 5,041.90 at a premium of 9.95 points over spot closing of 5,031.95, while Nifty October 2011 futures were at 5,054.95 at a premium of 23.00 points over spot closing. The near month September 2011 derivatives contract expires on Thursday, September 29, 2011. Nifty September futures saw addition of 6.81% or 1.63 million (mn) units, taking the total outstanding open interest (OI) to 25.59 mn units.

From the most active contract by contract value, SBI’s September 2011 futures were at a discount of 1.00 point at 1910.00 compared with spot closing of 1911.00. The number of contracts traded was 23,341.

L&T September 2011 futures were at a discount of 4.50 point at 1556.00 compared with spot closing of 1560.50. The number of contracts traded was 12,006.

Tata Motors September 2011 futures were at a discount of 1.05 point at 161.25 compared with spot closing of 162.30. The number of contracts traded was 18,540.

RIL September 2011 futures were at a premium of 1.15 point at 824.20 compared with spot closing of 823.05. The number of contracts traded was 15,259.

Maruti Suzuki September 2011 futures were at a premium of 1.05 point at 1141.00 compared with spot closing of 1139.95. The number of contracts traded was 10,674.

Among Nifty calls, 5100 SP from the September month expiry was the most active call with an addition of 0.64 million or 11.46%.

Among Nifty puts, 5000 SP from the September month expiry was the most active put with addition of 0.09million or 1.23%.

The maximum Call OI outstanding for Calls was at 5100 SP (6.19 mn) and that for Puts was at 5000 SP (8.11 mn).

The respective Support and Resistance levels are: Resistance 5060.48-- Pivot Point 5039.86-- Support 5011.33.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.50 for September-month contract.

The top five scrips with highest PCR on OI were Kotak Bank 2.49, BEML 2.00, Siemens 1.94, Hero Motocorp 1.29 and Reliance 1.26.

Among most active underlying, SBI witnessed an addition of 7.49% of Open Interest (OI) in the September month futures contract followed by Tata Motors witnessed an addition of 11.67% of Open Interest (OI) in the near month contract. Meanwhile Reliance and L&T witnessed an addition of 1.94% and 17.20% of OI respectively in the September month futures. Also, Tata Steel witnessed an addition of 5.86% of Open Interest (OI) in the September month contract.