Dismal numbers of SBI drags Nifty below its crucial 5,450 mark

Nifty ended the sluggish day of trade below it crucial 5,450 level on back of unsupportive global cues and lower than expected earnings from banking giant State Bank of India (SBI) at domestic front. The benchmark traded in the negative terrain most part of the day’s trade on Tuesday and snapped the session with a cut of more than one percent. Earlier, the Indian equity market opened on a quite note lacking any positive trigger and slipped into the red as investors remained cautious ahead of SBI’s result. The benchmark continued its choppy trade till afternoon as profit booking witnessed in index heavy-weight Reliance Industries and weak European markets also weighed on sentiments. In the mid afternoon trade, the index lost its track completely and witnessed a sharp fall of about 60 points and breached its crucial 5,450 mark after the country’s largest public sector bank reported its result below the street expectations. The bank has reported an 8.94% fall in its consolidated net profit at Rs 10,684.95 crore for the year ended March 31, 2011. For the year-ago period, the net profit was Rs 11,733.83 crore. Meanwhile stocks viz; Titan Industries, Shriram Transport, Mundra Port, Dabur, Bank of India and Asian paints closed the trade with a gain in the range of 2-4 percent on their inclusion in MSCI India index. In the final hour of trade, Nifty pared some of its losses but snapped the session with a cut of over a percent.

On the global front, the US markets extended their fall on Monday as the crisis in Europe persisted, while Asian stock markets ended mixed on Tuesday. Moreover, European counterparts too were trading mixed where major indices, CAC and FTSE trading higher while, DAX edged lower in the trade at this point of time. Back home, on the sectoral front, all the indices on NSE declined, Bank Nifty was the major laggard, losing 2.23% followed by CNX Infra down 0.53%, CNX Realty dipped 0.18% and CNX IT declined 0.02%. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 2.00% and reached 21.03, while S&P Nifty closed at 5,438.95 losing 60.05 points or 1.09%. The markets volumes remained over Rs 1.45 lakh crore while the turnover for NSE F&O segment remained higher compared to Monday at over 1.32 lakh crore.

The India VIX was down by 2.00% to 21.03 on Tuesday compared to its previous close of 21.46 on Monday.  

The 50-share S&P CNX Nifty finally settled at 5,438.95 after losing 60.05 points or 1.09%.

Nifty May 2011 futures closed at 5,450.00, at a premium of 11.05 points over spot closing of 5,438.95, while Nifty June 2011 futures were at 5,460.60 at a premium of 21.65 points over spot closing. The near month May 2011 derivatives contract expires on Thursday, May 26, 2011.

Nifty May futures saw addition of 8.09% or 2.10 million (mn) units, taking the total outstanding open interest (OI) to 28.06 mn units.

From the most active underlying, SBI’s May 2011 futures closed at a discount of 15.95 points at 2389.05 compared with spot closing of 2405.00. The number of contracts traded was 122,533.

ICICI Bank May 2011 futures were at a premium of 3.60 point at 1044.00 compared with spot closing of 1040.40. The number of contracts traded was 22,993.

Tata Steel May 2011 futures were at a premium of 1.00 points at 577.00 compared with spot closing of 576.00. The number of contracts traded was 19,241.

Tata Motors May 2011 futures were at a discount of 1.40 points at 1186.45 compared with spot closing of 1187.85. The number of contracts traded was 16,300.

RIL May 2011 futures were at a premium of 4.40 points at 923.30 compared with spot closing of 918.90. The number of contracts traded was 18,293.

For Nifty calls, 5500 strike price (SP) from the May series was the most active call with an addittion of 0.55 mn or 7.98%.

Among Nifty puts, 5500 SP from the May month expiry was the most active put with a contradiction of 0.79 mn or 12.48%.

The maximum Call OI outstanding was at 5500 SP (7.46) and that for Puts at 5500 SP (5.55).

The respective Support and Resistance levels are: Resistance 5501.51 -- Pivot Point 5461.28 -- Support 5398.71.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.68 for May-month contracts.

The top five scrips with highest PCR on OI were BRFL 1.92, Ranbaxy 1.56, Hero Honda 1.41, Grasim 1.38 and Tata Power 1.35.

Among most active underlying SBI witnessed an addition of 44.80% in the May month futures contract, followed by RIL which saw an addition of 5.67% of OI in the near month contract. Tata Steel  witnessed an addition of 6.14% in this month futures followed by ICICI Bank  which witnessed an addition of 7.22% in the May month futures contract and Tata Motors  which witnessed a contraction of 0.49% in the May month futures contract.