Nifty ends in red amid profit booking, weak global cues

S&P CNX Nifty snapping two sessions of gains ended lower on Thursday on profit booking by funds and retail investors amid weak global cues. On global front, European markets turned positive, after a subdued start with UK engineering group Weir among the main gainers as it benefited from a broker upgrade. Moreover, recovery in Asian markets too supported the sentiments.

Back home, Indian benchmark made a soft-to-cautious start as investors preferred to book profits after two sessions of gains ahead of the outcome of the Gujarat elections. Market continued its weak trade in the late morning session and reached its intra-day low due to the heavy selling in several stocks from metal, media, and banking sectors. Weak trade continued in noon session also as deteriorating federal budget negotiations in US fueled concerns that automatic tax increases and spending cuts will be triggered. In the late afternoon session, market pared losses but continued its weak trade on account of selling in frontline counters and also due to subdued European counterparts. However, the recovery was not enough to bring the indices back into green as risk appetite remained frail after assembly election where Gujarat Chief Minister Narendra Modi looked set for a third consecutive victory. Finally Nifty lost fifteen points but managed to end above its psychological 5,900 support level.

Meanwhile, most of the sectoral indices on the NSE settled on a mixed note, CNX Metal up by 1.27%, CNX Media up by 0.64%, CNX MNC up by 0.53%, CNX PSU Bank up by 0.43% and CNX IT up by 0.31% remained the top gainers in the trade. While CNX Auto down 0.68%, CNX Infra down 0.57%, CNX Finance down 0.31%, CNX PSE down 0.29% and CNX Energy down by 0.26% remained the loser. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, down by 1.03% and reached 14.32.

The India VIX witnessed contraction of 1.04% at 14.32 as compared to its previous close of at 14.47 on Wednesday.

The 50-share S&P CNX Nifty lost 13.20 points or 0.22% to settle at 5,916.40.

Nifty December 2012 futures closed at 5931.15 on Thursday at a premium of 14.75 points over spot closing of 5,916.40, while Nifty January 2013 futures ended at 5979.00, at a premium of 62.60 points over spot closing. Nifty December futures saw contraction of 1.76 million (mn) units taking the total outstanding open interest (OI) to 19.64 mn units. The near month December 2012 derivatives contract will expire on December 27, 2012.

From the most active contracts, Reliance Power December 2012 futures were at a premium of 0.60 at 96.65 compared with spot closing of 96.05. The number of contracts traded was 20,137.

Hindalco Industries December 2012 futures were at a premium of 0.25 at 133.00 compared with spot closing of 132.75. The number of contracts traded was 18,061.

DLF December 2012 futures were at a premium of 1.45 point at 226.55 compared with spot closing of 225.10. The number of contracts traded was 22,087.

Tata Motors December 2012 futures were at a premium of 2.20 point at 305.30 compared with spot closing of 303.10. The number of contracts traded was 14,485.

Tata Steel December 2012 futures were at a premium of 0.60 point at 432.10 compared with spot closing of 431.50. The number of contracts traded was 31,386.

Among Nifty calls, 6,000 SP from the December month expiry was the most active call with an addition of 0.69 million open interest.

Among Nifty puts, 5,800 SP from the December month expiry was the most active put with marginal contraction in open interest.

The maximum OI outstanding for Calls was at 6000 SP (12.02 mn) and that for Puts was at 5800 SP (9.49 mn).

The respective Support and Resistance levels are: Resistance 5942.18 -- Pivot Point 5911.82 -- Support 5886.03.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.27 for December -month contract.

The top five scrips with highest PCR on OI were Bajaj-Auto 1.77, Bank Baroda 1.59, PNB 1.58, Tata Motors 1.46 and Jindal Steel 1.31.

Among most active underlying, Unitech witnessed contraction of 0.16 million of Open Interest in the December month futures contract followed by Jaiprakash Associates which witnessed contraction of 4.98 million of Open Interest in the near month contract. Meanwhile, IFCI witnessed contraction of 5.24 million in the December month futures. Also, RCOM witnessed contraction of 5.09 million in Open Interest in the December month contract. Finally, R Power witnessed contraction of 9.05 million of Open Interest in the near month futures contract.