Nifty ends lower amid weak global cues

S&P CNX Nifty ended lower on Friday as weak global cues and a sell-off in large cap stocks on subdued Q3 earnings weighed on sentiments. On global front, Asian pacific shares ended mostly lower as weak European data and caution before the Group of Twenty (G20) meeting this weekend weighed on stocks. Meanwhile, disappointing news from Germany’s economy sent European markets lower as investors turned their attention to a major economic conference this weekend. Germany’s economy contracted by 0.6% in the last quarter of 2012 as recession deepened across the 17 European Union countries that use the euro. Further, weaker financial and chemicals stocks weighed on European markets on Friday.

Back home, pressurized by sluggish global cues, Indian equity benchmark made a gap-down opening below its crucial 5,900 level. A deepening recession in the euro zone weighed on investors’ sentiments. In the first half of trade, market traded in red as investors reacted negatively to the SEBI’s action of imposing a total penalty of Rs 30.75 crore on 118 entities, including the promoters of erstwhile Bank of Rajasthan (BoR), for manipulative practices in the stock market. Lower-than-expected third quarter earnings by some blue-chip companies also triggered selling. Traders booked profits in heavyweights like Dr Reddy and DLF among others after they reported disappointing third quarter results. Market continued its weak trade in the second half too on account of selling in frontline counters. However, in the last leg of trade, market cut its losses as investors were seen piling positions in auto, infra and PSU banks stocks. Finally, Nifty ended the session with a loss of 9 points.

Meanwhile, sectoral indices on the NSE made a mixed closing. CNX PSU Bank up by 0.52%, CNX Infra up by 0.50%, CNX Auto up by 0.40%, CNX PSE up by 0.17% and CNX Finance up by 0.15% remained the top gainers in the trade. While CNX Media down 0.93%, CNX energy down 0.62%, CNX IT down 0.52% and CNX pharma down 0.48% remained the losers. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, up by 0.99% and reached 15.24.

The India VIX witnessed an addition of 0.99% at 15.24 as compared to its previous close of at 15.09 on Thursday.

The 50-share S&P CNX Nifty lost 9.55 points or 0.16% to settle at 5,887.40.

Nifty February 2013 futures closed at 5,892.65 on Friday at a premium of 5.25 points over spot closing of 5,887.40, while Nifty March 2013 futures ended at 5,923.85, at a premium of 36.45 points over spot closing. Nifty February futures saw an addition of 0.74 million (mn) units taking the total outstanding open interest (OI) to 14.80 mn units.

The near month February 2013 derivatives contract will expire on February 28, 2013.

From the most active contracts, JP Associates February 2013 futures were trading at a premium of 0.40 points at 72.10 compared with spot closing of 71.70. The number of contracts traded was 10,411.

Reliance Communications February 2013 futures were trading at a premium of 0.45 points at 71.00 compared with spot closing of 70.55. The number of contracts traded was 8,856.

Tata Motors February 2013 futures were trading flat compared with spot closing of 304.70. The number of contracts traded was 23,166.

DLF February 2013 futures were at a premium of 1.95 points at 249.95 compared with spot closing of 248.00. The number of contracts traded was 18,665.

Reliance Industries February 2013 futures were at a premium of 2.80 points at 846.55 compared with spot closing of 843.75. The number of contracts traded was 17,731.

Among Nifty calls, 6,100 SP from the February month expiry was the most active call with an addition of 0.26 million open interest.

Among Nifty puts, 5,900 SP from the February month expiry was the most active put with  contraction of 0.85 million open interest.

The maximum OI outstanding for Calls was at 6100 SP (8.24 mn) and that for Puts was at 5,900 SP (6.95 mn).

The respective Support and Resistance levels are: Resistance 5906.93 -- Pivot Point 5880.42-- Support 5860.88.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.26 for February -month contract.

The top five scrips with highest PCR on OI were Welcorp 1.90, TCS 1.88, India Cement 1.57, IndusindBK 1.47 and ITC 1.28.

Among most active underlying, NHPC witnessed an addition of 0.55 million of Open Interest in the February month futures contract followed by Unitech which witnessed an addition of 2.61 million of Open Interest in the near month contract. Meanwhile, Suzlon Energy witnessed of contraction of 3.47 million in the February month futures. Also, Jaiprakash Associates witnessed an addition of 0.19 million in Open Interest in the February month contract. Finally, IFCI witnessed contraction of 0.22 million of Open Interest in the near month futures contract.