Nifty ends in red; November WPI eyed

Wiping out all its initial gains, S&P CNX Nifty ended the session in red on Thursday as investors sold-off riskier shares and squared off position in last leg of trade, amid fears that country's headline inflation will increase in November, which dashed hopes of a rate cut by the central bank in the monetary policy next week. On the global front, Asian shares concluded mostly in green for a seventh consecutive session on Thursday, after the US Federal Reserve took new stimulus steps to bolster the economy, pressuring the yen with expectations that the Japanese central bank will follow suit with more easing next week. However, European shares were trading into red terrain in early trade as investors balanced a new monetary boost from the US Federal Reserve with lingering concerns that austerity measures could derail the world's largest economy.

Back home, the Indian markets failed to capitalize on their early leads as sentiments remained fragile in absence of any constructive work being done in Parliament, with Samajwadi Party (SP) creating a ruckus over the quota bill and an angry deputy chairman PJ Kurien asking that its member be evicted. Market traded in a tight band till mid noon trade near its pre-close level. But, weak opening in European counters dragged the Indian benchmark lower. FMCG sector played the spoilsport for the market, declining over two and a half percent. Selling pressure intensified and market breached its crucial 5,850 mark after cement companies like ACC and Ambuja Cements, both Holcim Group companies, dipped almost 2 per cent each in late noon deals after ACC said its board has approved for payment of 1 per cent of the net annual sales of the firm as technology and know-how fees to Switzerland’s Holcim with effect from January 1, 2013. Additionally, Telecom stocks staged a mixed close ahead of government meeting for discussing the recommendations made by the Empowered Group of Ministers (EGoM) on pricing of spectrum that remained unsold in the recently conducted auction on November 14, 2012. Finally, Nifty ended the session near its intraday low with a cut of over half a percent.

Meanwhile, most of the sectoral indices on the NSE settled in red, CNX FMCG down 2.68%, CNX Reality down 2.12%, CNX PSU Banks down 1.49%, CNX Metal down 1.12% and CNX Infra down 0.83% remained the top losers in the trade. While CNX Auto up by 0.82% and CNX Energy up by 0.01% remained the only gainers. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, up 1.38% and reached 14.71.

The India VIX witnessed an addition of 1.38% at 14.71 as compared to its previous close of at 14.51 on Wednesday.

The 50-share S&P CNX Nifty lost 36.50 points or 0.62% to settle at 5,851.50.

Nifty December 2012 futures closed at 5876.45 on Thursday at a premium of 24.95 points over spot closing of 5,851.50, while Nifty January 2013 futures ended at 5914.50, at a premium of 63.00 points over spot closing. Nifty December futures saw an addition of 0.38 million (mn) units taking the total outstanding open interest (OI) to 21.50 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 0.65 at 74.90 compared with spot closing of 74.25. The number of contracts traded was 15,535.

NMDC December 2012 futures were at a premium of 0.35 at 158.05 compared with spot closing of 157.70. The number of contracts traded was 40,432.

Tata Motors December 2012 futures were at a premium of 1.55 point at 289.25 compared with spot closing of 287.70. The number of contracts traded was 30,102.

ITC December 2012 futures were at a premium of 1.45 point at 296.40 compared with spot closing of 294.95. The number of contracts traded was 14,490.

ICICI Bank December 2012 futures were at a premium of 3.90 point at 1126.80 compared with spot closing of 1122.90. The number of contracts traded was 14,854.

Among Nifty calls, 6,000 SP from the December month expiry was the most active call with an addition of 0.50 million open interest.

Among Nifty puts, 5,800 SP from the  December month expiry was the most active put with  an addition  of 0.07 million open interest.

The maximum OI outstanding for Calls was at 6000 SP (11.56 mn) and that for Puts was at 5800 SP (8.23 mn).

The respective Support and Resistance levels are: Resistance 5892.18 -- Pivot Point 5866.77 -- Support 5826.08.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.19 for December -month contract.

The top five scrips with highest PCR on OI were Bajaj-Auto 1.95, Abirlanuvo 1.25, PNB 1.15, Asian Paint 1.15 and Bank Baroda 1.07.

Among most active underlying, Unitech witnessed contraction of 1.51 million of Open Interest in the December month futures contract followed by IFCI which witnessed  contraction of 0.45 million of Open Interest in the near month contract. Meanwhile, Jaiprakash Associates witnessed contraction of 0.34 million in the December month futures. Also, Reliance Communications witnessed contraction of 3.27 million in Open Interest in the December month contract. Finally, NMDC witnessed an addition of 4.15 million of Open Interest in the near month futures contract.