Nifty ends lower amid profit booking

S&P CNX Nifty ended lower on Tuesday amid profit booking in rate sensitive shares as Reserve Bank of India (RBI) cautioned that there was less room for aggressive cuts in future due to concerns over inflation. On global front, Asian markets ended mostly higher on Tuesday, with Australia leading gains after reopening following a public holiday. Regional markets were seen positioning themselves ahead of a string of major economic events later this week. Meanwhile, European stock markets nudged higher in choppy trade on Tuesday, with resource firms on the rise, as encouraging German consumer-confidence data helped lift sentiment.

Back home, Indian equity benchmark made a flat-to-negative start and hovered little below their pre-close mark in the morning session as market participants remained on sidelines ahead of RBI’s third-quarter policy review. After the rate cut announcement, market turned positive in the noon session and crossed the crucial 6,100 mark. The RBI, in ‘Third Quarter Review of Monetary Policy 2012-13’, slashed  repo rate by 25 basis points to 7.75% against 8% earlier and also cut cash reserve ratio (CRR) of scheduled banks by 25 basis points from 4.25% to 4.0%. However, in the late afternoon session, market pared its early gain and turned into red on the back of profit booking in rate sensitive stocks as the investors’ sentiment were turned down after the RBI cautioned that inflation continues to remain above its comfort zone and also said that the government should initiate measures to control the fiscal deficit. Finally, Nifty ended the session near its intra-day low.  

Meanwhile, most of the sectoral indices on the NSE made a negative closing. CNX Realty down 2.45%, CNX Media down 1.53%, CNX PSU Bank down 1.51%, CNX Auto down 0.90% and CNX PSE down 0.67% remained the top losers in the trade. While CNX FMCG up by 0.55% remained the only gainer. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, down by 4.61% and reached 14.47.  

The India VIX witnessed contraction of 4.61% at 14.47 as compared to its previous close of at 15.17 on Monday.

The 50-share S&P CNX Nifty lost 24.90 points or 0.41% to settle at 6,049.90.

Nifty January 2013 futures closed at 6049.40 on Tuesday at a discount of 0.50 points over spot closing of 6,049.90, while Nifty February 2013 futures ended at 6089.30, at a premium of 39.40 points over spot closing. Nifty January futures saw contraction of 1.36 million (mn) units taking the total outstanding open interest (OI) to 9.50 mn units.

The near month January 2013 derivatives contract will expire on January 31, 2013.

From the most active contracts, Unitech January 2013 futures were trading at a premium of 0.10 points at 34.95 compared with spot closing of 34.85. The number of contracts traded was 21,182.

Reliance Communications January 2013 futures were at a premium of 0.05 points at 81.05 compared with spot closing of 81.00. The number of contracts traded was 21,524.

BHEL January 2013 futures were at a discount of 0.25 points at 223.50 compared with spot closing of 223.75. The number of contracts traded was 15,309.

DLF January 2013 futures were at a discount of 0.20 points at 262.75 compared with spot closing of 262.95. The number of contracts traded was 27,675.

Reliance Industries January 2013 futures were at a premium of 1.10 point at 884.05 compared with spot closing of 882.95. The number of contracts traded was 19,215.

Among Nifty calls, 6,200 SP from the January month expiry was the most active call with an addition of 3.59 million open interest.

Among Nifty puts, 6,000 SP from the January month expiry was the most active put with contraction of 0.35 million open interest.

The maximum OI outstanding for Calls was at 6200 SP (12.81 mn) and that for Puts was at 6,000 SP (8.31mn).

The respective Support and Resistance levels are: Resistance 6093.65 -- Pivot Point 6068.05 -- Support 6024.3.

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

The top five scrips with highest PCR on OI were SR Transfin 3.29, Infosys 2.13,  Mcleodruss 2.00,  Maruti 1.64and Axis Bank 1.63.

Among most active underlying, NHPC witnessed contraction of 14.82 million of Open Interest in the January month futures contract followed by Unitech which witnessed contraction of 21.89 million of Open Interest in the near month contract. Meanwhile, JP Associates witnessed of contraction of 7.44million in the January month futures. Also, R com witnessed contraction of 19.57 million in Open Interest in the January month contract. Finally, R power witnessed contraction of 9.66 million of Open Interest in the near month futures contract.