Nifty ends below 5,650 level on weak global cues

Pressurized by feeble global cues, CNX S&P Nifty ended the subdued session with a cut of over half a percent on Thursday, extending its southward journey to fifth day in a row. The benchmark traded in red throughout the day’s trade and ended the session below crucial 5,650 mark. On the global front, Asian stocks mostly fell on Thursday as investors reacted to the prospect of drawn-out negotiations over the looming US ‘fiscal cliff’ by shedding riskier assets, but Japanese equities bucked the trend as a sharp slide in the yen lifted exporters’ shares. Moreover, European markets also traded in the red during early deals as anti-austerity strikes across southern Europe and Greece’s unresolved debt crisis put the euro zone’s troubles back in focus. Back home, some amount of pressure also came in from software pack as it tumbled about two percent after the IT industry body Nasscom lowered its growth expectation for the industry this financial year. Nasscom now expects the export growth in dollar terms to be at the lower end of the 11-14% that it had forecast in February.

Earlier, benchmark kick started the session in red tracking subdued global cues. The index extended its downfall as traders’ sentiment took a hit with the lackluster response to the government’s much anticipated 2G spectrum auction. The much-talked 2G mobile phone spectrum auction virtually flopped with just Rs 9,407 crore being garnered in the process contrary to the high valuation estimated by the CAG in its report. The government was targeting a minimum of Rs 28,000 crore from the sale of 2G spectrum in the GSM band and the tepid response may upset its efforts to meet the revised fiscal deficit target of 5.3 percent of GDP. The local index continued to trade lower as investors reacted depressingly to the revision in August inflation numbers. A sharp upward revision in the August numbers overshadowed the lower-than-expected October figure. Nifty touched its intraday low near its crucial 5,600 level following sluggish start in European markets. However, in the last leg of trade market recovered some lost ground after Finance Minister said most state-run banks need an infusion of additional capital and a decision will be taken in the next few weeks. Further, FM urged RBI to start working on issuing final guidelines for granting licenses to new banks and receiving applications from the interested entities in anticipation of Banking Regulation Act (BRA) being amended. However, the recovery was not that much effective to take the index into green but, Nifty managed to hold its crucial 5,600 mark.

Meanwhile, most of the sectoral indices on the NSE were settled in the red, CNX IT remained the major loser, down 1.73% followed by CNX Metal down 1.53% and CNX FMCG down by 1.21% while CNX Media and CNX Realty rose 4.30% and 2.28% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged by 4.15% and reached 15.53.

The India VIX witnessed an addition of 4.15% at 15.53 as compared to its previous close of at 14.91 on Tuesday.

The 50-share S&P CNX Nifty lost 35.95 points or 0.63% to settle at 5,631.00.

Nifty November 2012 futures closed at 5649.15 on Thursday at a premium of 18.15 points over spot closing of 5,631.00, while Nifty December 2012 futures ended at 5684.60, at a premium of 53.60 points over spot closing. Nifty November futures saw contraction of 1.38 million (mn) units taking the total outstanding open interest (OI) to 16.95 mn units. The near month November 2012 derivatives contract will expire on November 29, 2012.

From the most active contracts, Unitech November 2012 futures were trading at a premium of 0.15 at 28.55 compared with spot closing of 28.40. The number of contracts traded was 10,865.

Reliance Communications November 2012 futures were trading at a premium of 0.65 at 63.90 compared with spot closing of 63.25. The number of contracts traded was 14,976.

JP Associates November 2012 futures were at a discount of 0.10 point at 91.15 compared with spot closing of 91.25. The number of contracts traded was 12,278.

Tata Motors November 2012 futures were at a discount of 0.25 point at 272.25 compared with spot closing of 272.50. The number of contracts traded was 19,502.

DLF November 2012 futures were at a premium of 1.90 point at 210.35 compared with spot closing of 208.45. The number of contracts traded was 16,308.

Among Nifty calls, 5,800 SP from the November month expiry was the most active call with  an addition of 0.91 million open interest.

Among Nifty puts, 5,600 SP from the November month expiry was the most active put with  contraction  of 0.50 million open interest.

The maximum OI outstanding for Calls was at 5800 SP (9.33 mn) and that for Puts was at 5600 SP (7.76 mn).

The respective Support and Resistance levels are: Resistance 5653.92 -- Pivot Point 5628.73 -- Support 5605.82.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.97 for November -month contract.

The top five scrips with highest PCR on OI were Welcorp 2.57, Abirlanuvo 2.00, Maruti 1.66, Canara Bank 1.61 and Titan 1.55.

Among most active underlying, Unitech witnessed an addition of 12.15 million of Open Interest in the November month futures contract followed by Jaiprakash Associates which witnessed  contraction of 0.45 million of Open Interest in the near month contract. Meanwhile, IFCI witnessed an addition of 1.15 million in the November month futures. Also, RCOM witnessed an addition of 1.62 million in Open Interest in the November month contract. Finally, Hindalco witnessed an addition of 0.21 million of Open Interest in the near month futures contract.