Nifty tumbles below 5,700 mark on disappointing Q2 earnings

CNX S&P Nifty ended the session below its crucial 5,700 mark with a cut of about a percent due to disappointing second quarter numbers reported by SBI, Tata Steel and ONGC. Moreover, global cues too added fuel to the fire as the US equity markets fell overnight as concerns over the looming fiscal cliff overshadowed a pair of better-than-expected economic reports while, Asian markets shut shop mostly in the red as investors’ sentiments were weighed down by worries over the risk of a looming fiscal crisis in the world’s largest economy, while Europe still expects a bailout for Greece. European markets were trading flat at this point of time as concerns about the US ‘fiscal cliff’ and the euro-zone economy were balanced by positive data from China, which suggest that the country’s economy has bottomed out. Back home, sentiments also remained somber after FICCI’s latest quarterly survey on manufacturing projected subdued growth in key sectors such as automotive, capital goods, metal and chemicals in the third quarter.

Earlier, benchmark made a flat-to-positive opening supported by telecom stocks like Idea Cellular, Bharti Airtel and MTNL which edged higher in early trade after Supreme Court asked the government to immediately explain why it is restricting the sale of airwaves in the upcoming auctions, and not selling all spectrum vacated by the 122 licences whose permits were cancelled earlier this year. But, in the second half, market reversed its direction after State Bank of India (SBI) reported disappointing asset quality for the second quarter ending September 2012 though, on consolidated basis, reported 31.84% rise in its net profit at Rs 4575.31 crore for the quarter as compared to Rs 3470.43 crore for the same quarter in the previous year. The sentiments continued to reel under pressure as ONGC reported awful Q2FY13 numbers. Moreover, the world’s sixth largest steel making company Tata Steel too disappointed the street by reporting lower than expected numbers on standalone as well as consolidated basis, sending its shares down by over 3 percent. Selling got intensified in the second half as PSU Bank counters tumbled about three percent after SBI disappointed with its Q2 numbers. Other PSU banks like Allahabad Bank, Andhra Bank, Bank of India, Canara Bank, Central Bank of India, Dena Bank, IOB, Indian Bank, OCB, UCO Bank and Union Bank were down 1-3 percent due to weak sentiment. Finally, Nifty ended the session near its intraday low below its crucial 5,700 mark with a cut of over fifty points.

Meanwhile, all the sectoral indices on the NSE were settled in the red, CNX PSU Bank remained the major loser, down 2.98% followed by CNX Media down 2.28% and CNX Realty down by 1.50% in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, increased by 1.05% and reached 14.37.

The India VIX witnessed an addition of 1.05% at 14.37 as compared to its previous close of at 14.22 on Thursday.

The 50-share S&P CNX Nifty lost 52.50 points or 0.91% to settle at 5,686.25.

Nifty November 2012 futures closed at 5720.60 on Friday at a premium of 34.35 points over spot closing of 5,686.25, while Nifty December 2012 futures ended at 5754.25, at a premium of 68.00 points over spot closing. Nifty November futures saw an addition of 0.03 million (mn) units taking the total outstanding open interest (OI) to 18.90 mn units. The near month November 2012 derivatives contract will expire on November 29, 2012.

From the most active contracts, Tata Motors November 2012 futures were trading at a premium of 1.45 at 282.35 compared with spot closing of 280.90. The number of contracts traded was 13,240.

DLF November 2012 futures were trading at a premium of 1.25 at 211.95 compared with spot closing of 210.70. The number of contracts traded was 15,136.

IDBI November 2012 futures were at a premium of 1.25 point at 105.55 compared with spot closing of 104.30. The number of contracts traded was 10,120.

Tata Steel November 2012 futures were at a premium of 3.95 point at 392.20 compared with spot closing of 388.25. The number of contracts traded was 37,081.

Reliance Industries November 2012 futures were at a premium of 6.50 point at 792.80 compared with spot closing of 786.30. The number of contracts traded was 13,339.

Among Nifty calls, 6000 SP from the November month expiry was the most active call with an addition of 0.04 million open interest.

Among Nifty puts, 5600 SP from the November month expiry was the most active put with an addition  of 0.24 million open interest.

The maximum OI outstanding for Calls was at 6000 SP (8.29 mn) and that for Puts was at 5600 SP (7.38 mn).

The respective Support and Resistance levels are: Resistance 5732.72 -- Pivot Point 5705.23 -- Support 5758.76.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.09 for November -month contract.

The top five scrips with highest PCR on OI were Abirlanuvo 2.00, Tata Motors 1.76, Maruti 1.65, Canara Bank 1.63 and Jubl Food 1.56.

Among most active underlying, Unitech witnessed contraction of 0.68 million of Open Interest in the November month futures contract followed by IFCI which witnessed contraction of 0.82 million of Open Interest in the near month contract. Meanwhile, Jaiprakash Associates witnessed contraction of 1.54 million in the November month futures. Also, RCOM witnessed an addition of 1.44 million in Open Interest in the November month contract. Finally, Tata Motors witnessed contraction of 1.18 million of Open Interest in the near month futures contract.