Nifty ends below 5,900 mark; IIP data eyed

S&P CNX Nifty, after hitting 23 months high in early trade, pared all its gains to end tad below its crucial 5,900 level on Tuesday, as investor booked early profit on worries over a widening trade deficit and ahead of the October industrial production data due on December 12, 2012. However, global cues remained positive as Asian counters ended mostly in the green on hopes that US Federal Reserve will take fresh economic stimulus measures this week to support growth in the world largest economy. Moreover, European markets too traded firmly in the early trade after Germany’s economic confidence turned positive in December for the first time since May 2012.

Back home, Indian equity benchmark made a gap-up opening as investors piled up positions in banking stocks on expectation of rate cut by the Reserve Bank in its monetary policy review next week. But, investors offloaded their holding in banking scrips as both Houses of Parliament were adjourned before taking up the Banking Amendment Bill. The Banking Amendment Bill entails easing voting rules of shareholders in banks to attract foreign investment and allows the central bank more powers. Selling got intensified and market touched its intraday low, as Indian Exports declined for seventh straight month in a row by 4.17 per cent in November 2012 due to slowdown in demand in the US and European markets. While, imports grew by 6.35% to $41.5 billion in November, leading to the trade deficit of $19.28 billion in November 2012 from $15.83 in November 2011. Selling pressure continued in late trade as stocks from realty space were hammered badly due to profit booking after recent strong gains. Some pressure also came in after shares of organized retailers declined for the second straight day as uproar continued in Lok Sabha over the Walmart lobbying report. However, market came out from their lows to end tad below its pre-close level as European counters showed uptrend after a mixed opening. Finally, Nifty snapped the day’s trade tad below its crucial 5,900 mark.

Meanwhile, most of the sectoral indices on the NSE settled in red, CNX Realty remained the major loser, down 2.11% followed by CNX Media down 1.86% and CNX PSU Bank down by 1.02% while CNX FMCG and CNX MNC rose 0.74% and 0.38% remained the top losers in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 1.10% and reached 14.67.

The India VIX witnessed an addition of 1.10% at 14.67 as compared to its previous close of at 14.51 on Monday.

The 50-share S&P CNX Nifty lost 10.10 points or 0.17% to settle at 5,898.80.

Nifty December 2012 futures closed at 5928.40 on Tuesday at a premium of 29.60 points over spot closing of 5,898.80, while Nifty January 2013 futures ended at 5963.55, at a premium of 64.75 points over spot closing. Nifty December futures saw an addition of 0.19 million (mn) units taking the total outstanding open interest (OI) to 20.33 mn units. The near month December 2012 derivatives contract will expire on December 27, 2012.

From the most active contracts, Reliance Communications December 2012 futures were at a premium of 0.55 at 75.30 compared with spot closing of 74.75. The number of contracts traded was 12,979.

JP Associates December 2012 futures were at a discount of 0.15 at 103.50 compared with spot closing of 103.65. The number of contracts traded was 12,345.

Tata Motors December 2012 futures were at a premium of 1.75 point at 280.00 compared with spot closing of 278.25. The number of contracts traded was 15,352.

DLF December 2012 futures were at a premium of 1.40 point at 218.85 compared with spot closing of 217.45. The number of contracts traded was 14,350.

Reliance Industries December 2012 futures were at a premium of 7.70 point at 825.25 compared with spot closing of 817.55. The number of contracts traded was 13,119.

Among Nifty calls, 6,000 SP from the December month expiry was the most active call with an addition of 1.03 million open interest.

Among Nifty puts, 5,800 SP from the  December month expiry was the most active put with  an addition  of 0.60 million open interest.

The maximum OI outstanding for Calls was at 6000 SP (10.28mn) and that for Puts was at 5800 SP (7.88 mn).

The respective Support and Resistance levels are: Resistance 5954.15 -- Pivot Point 5908.03 -- Support 5854.45.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.23 for December -month contract.

The top five scrips with highest PCR on OI were Bajaj-Auto 1.44, HDFC 1.38, PNB 1.19, Bank Baroda 1.15 and Asian Paint 1.07.

Among most active underlying, Unitech witnessed contraction of 4.60 million of Open Interest in the December month futures contract followed by IFCI which witnessed an addition of 1.36 million of Open Interest in the near month contract. Meanwhile, Jaiprakash Associates witnessed an addition of 0.35 million in the December month futures. Also, Reliance Communications witnessed contraction of 0.68 million in Open Interest in the December month contract. Finally, Shree Renuka Sugars witnessed an addition of 0.89 million of Open Interest in the near month futures contract.