Nifty ends on flat note ahead of Union Budget

CNX Nifty ended flat on Monday as investors traded cautiously ahead of February month derivative expiry and the Union Budget 2013-14. On global front, majority of the Asian markets ended in green, though the flash report of China’s manufacturing activity expanding at the slowest pace in four months casted shadow of economic weakness in the region. However, the European markets made an all green start on speculation that Bank of Japan’s new Governor will go for aggressive stimulus policy.

Back home, Indian equity benchmark made a flat start as market participants traded cautiously ahead of February month derivative expiry and the Union Budget 2013-14. In the morning session, market turned positive on the back of firm global cues as the US markets bounced back and ended higher on Friday, reducing their weekly losses on some supportive European cues. Sentiments also got some support as select non-banking finance companies (NBFC) shares including Mahindra & Mahindra Financial Services, L&T Finance Holdings and Bajaj Finserv among others all edged higher in early morning deals after the Reserve Bank of India (RBI) issued guidelines for the new bank licences, which will pave the way for both corporate entities and NBFC to begin banking operations. In the noon session, market entered the negative territory on the back of report of some margin call, as wary traders were selling stocks. Traders booked profit in realty, infra and metal stocks. However, in the late afternoon session, market again turned positive on account of buying in frontline counters and taking supportive cues from European counterparts. Traders were seen piling up position in IT and Auto stocks. However, investors opted for conservative approach before taking position in risky assets ahead of the Union Budget 2013-14 and the Railway Budget scheduled to be released tomorrow. Finally, Nifty ended the session on flat note.    

Meanwhile, sectoral indices on the NSE made a mixed closing. CNX IT up by 1.46%, CNX Auto up by 0.81%, CNX Pharma up by 0.17% and CNX Finance up by 0.12% remained the top gainers in the trade. While CNX Realty down 2.99%, CNX Metal down 1.28%, CNX infra down 1.04%, CNX Energy down 0.75% and CNX PSE down 0.71% remained the losers. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, down by 0.36% and reached 16.73.

The India VIX witnessed contraction of 0.36% at 16.73 as compared to its previous close of at 16.79 on Friday.

The 50-share S&P CNX Nifty gained 4.45 points or 0.08% to settle at 5,854.75.

Nifty February 2013 futures closed at 5,857.80 on Monday at a premium of 3.05 points over spot closing of 5,854.75, while Nifty March 2013 futures ended at 5,893.15, at a premium of 38.40 points over spot closing. Nifty February futures saw contraction of 0.72 million (mn) units taking the total outstanding open interest (OI) to 15.83 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 0.25 points at 68.25 compared with spot closing of 68.00. The number of contracts traded was 16,531.

BHEL February 2013 futures were trading at a discount of 0.40 points at 207.70 compared with spot closing of 208.10. The number of contracts traded was 14,006.

Tata Motors February 2013 futures were trading at a premium of 0.30 points at 299.60 compared with spot closing of 299.30. The number of contracts traded was 11,164.

DLF February 2013 futures were at a premium of 0.45 points at 272.35 compared with spot closing of 271.90. The number of contracts traded was 18,247.

ICICI Bank February 2013 futures were at a premium of 1.50 points at 1093.45 compared with spot closing of 1091.95. The number of contracts traded was 14,090.

Among Nifty calls, 6,000 SP from the February month expiry was the most active call with contraction of 1.07 million open interest.

Among Nifty puts, 5,800 SP from the February month expiry was the most active put with contraction of 0.52 million open interest.

The maximum OI outstanding for Calls was at 6000 SP (9.31 mn) and that for Puts was at 5,800 SP (7.10 mn).

The respective Support and Resistance levels are: Resistance 5880.43-- Pivot Point 5852.72 -- Support 5827.03.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.80 for February -month contract.

The top five scrips with highest PCR on OI were TCS 1.80, Sun Pharma 1.72, Infosys 1.66, IndusInd Bank 1.34 and India Cement 1.34.

Among most active underlying, NHPC witnessed contraction of 16.83 million of Open Interest in the February month futures contract followed by Unitech which witnessed contraction of 3.72 million of Open Interest in the near month contract. Meanwhile, Jaiprakash Associates witnessed of a contraction of 8.24 million in the February month futures. Also, IFCI witnessed contraction of 1.93 million in Open Interest in the February month contract. Finally, RCOM witnessed contraction of 6.76 million of Open Interest in the near month futures contract.