Nifty sees consolidation ahead of Fed meet; ends with marginal cut

The S&P CNX Nifty went in consolidation mood and ended the choppy day of trade with a marginal cut as investors took some money off the table ahead of the US Federal Reserve meet. However, Fed is likely to push long-term borrowing costs lower by rebalancing its $2.8 trillion portfolio of bond holdings to weight more heavily to longer-term securities, in a bid to encourage mortgage refinancing without stoking a run-up in consumer price. Earlier, the Indian equity market made a cautious start amid global uncertainty but, the index immediately started moving north on the back of broad based buying and Market recaptured its crucial 5150 mark in the early trade. The domestic index slipped into the red in mid morning trade as investors remained cautious as International Monetary Fund cut its global growth forecasts for the calendar year 2011 and 2012. It expects India to grow by 7.8% in 2011 against the earlier estimates of 8.2%, and 7.5% in 2012 besides the earlier estimate of 7.8%. Afterwards, the index witnessed directionless trade and crawled near its neutral line till late morning trade lacking any significant trigger. In the early noon session, the benchmark slipped into the red after gaining 15-20 points on the back of weak opening in European counterparts. The sentiment continued to remain bearish in the mid noon trade and index touched its intraday low, as the European markets extended their losses. After that, some amount of recovery witnessed in final hour of trade as investors remained optimistic that the Federal Reserve will announce new monetary easing steps to boost the world’s largest economy. Finally, Nifty snapped the sluggish day of trade with a marginal cut of 7 points as selling pressure witnessed in stocks like RIL and Cairn which lost 1-3 percentage point.

On the global front, the US markets made a mixed closing overnight after a very volatile session, while, Most of the Asian counterparts ended the day’s trade in the positive terrain on Wednesday as investors remained optimistic that the Federal Reserve will announce new monetary easing steps to boost the world's largest economy. However, most of the European counterparts were trading in the red at this point of time. Back home, on the sectoral front on NSE, CNX Energy remained the major loser, down 0.99% followed by CNX MNC and CNX FMCG down by 0.58% and 0.22% respectively while, Bank Nifty and CNX Realty rose 1.19% and 1.12% respectively. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, added 1.54% and reached 27.67, while S&P Nifty closed at 5,133.25 losing 6.95 points or 0.14%.

The India VIX gained by 1.54% at 27.67 as compared to its previous close of 27.25 on Tuesday.

The 50-share S&P CNX Nifty lost 6.95 points or 0.14% and settled at 5,133.25.

Nifty September 2011 futures closed at 5,135.15 at a premium of 1.90 points over spot closing of 5,133.25, while Nifty October 2011 futures were at 5,154.45 at a premium of 21.20 points over spot closing. The near month September 2011 derivatives contract expires on Thursday, September 29, 2011.

From the most active contract by contract value, SBI's September 2011 futures were at a discount of 2.00 point at 2000.00 compared with spot closing of 2002.00. The number of contracts traded was 35,699.

RIL September 2011 futures were at a premium of 3.20 point at 838.25 compared with spot closing of 835.05. The number of contracts traded was 26,128.

ICICI Bank September 2011 futures were at a discount of 3.90 point at 896.00 compared with spot closing of 899.90. The number of contracts traded was 19,314.

Axis Bank September 2011 futures were at a discount of 4.00 point at 1151.00 compared with spot closing of 1155.00. The number of contracts traded was 14,800.

L&T September 2011 futures were at a premium of 5.00 point at 1562.00 compared with spot closing of 1557.00. The number of contracts traded was 9,954.

Among Nifty calls, 5200 SP from the September month expiry was the most active call with a decline of 0.37 million or 5.50%.

Among Nifty puts, 5100 SP from the September month expiry was the most active put with addition of 0.26 million or 4.74%.

The maximum Call OI outstanding for Calls was at 5200 SP (7.11 mn) and that for Puts was at 5000 SP (5.76 mn).

The respective Support and Resistance levels are: Resistance 5164.48 -- Pivot Point 5137.16 -- Support 5105.93.

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 United Phosphorus 6.00, United Spirits 4.00, Kotak Bank 2.46, Siemens 2.22, BEML 2.00 and IRB Infrastructure Developers 1.67.

Among most active underlying, witnessed an addition of 8.06% of Open Interest (OI) in the September month futures contract followed by RIL witnessed an addition of 5.36% of Open Interest (OI) in the near month contract. Meanwhile ICICI Bank witnessed an addition of 3.75% of OI respectively in the September month futures.  Finally, Tata Motors witnessed a contraction of 2.73% of Open Interest (OI) in the September month contract.