Nifty ends below crucial 5,700 mark

CNX Nifty ended lower on Monday as global risk aversion sparked broad-based selling in metal, realty, and infra stocks after US lawmakers failed to come to a conclusion to avert the imposition of $85 billion in spending cuts that kicked in on Friday last week. On global front, Asian markets shut shop mostly in the red with Chinese benchmark losing over three percent after China announced to tighten its mortgage rules to cool the property market. Moreover, European counters traded choppy in early deals on concerns about Italy’s political picture.

Back home, Indian equity benchmark made a lackluster start with breaching its crucial 5,700 levels amid sluggish Asian cues. In the first half, market traded in red as sentiments got dented after Reserve Bank of India Governor D Subbarao said that India’s growth story is still intact, with the potential to grow at double digit rates, provided some issues are addressed, as a mere 5-6% growth is not sufficient. Market continued its negative trade in the second half too, in absence of any positive upside triggers. Sentiments also got dampened by a patchy global growth outlook and weak data from Europe, but losses remain capped as market received some support from Moody’s Investors Service, which stated that India’s 2013/14 Budget unveiled last week offered a realistic plan to meet the country’s fiscal deficit target, and should be a credit positive for its sovereign ratings. Traders were seen piling up position in pharma and finance stocks. Finally, Nifty ended the session with a loss of 21 points. 

Meanwhile, most of the sectoral indices on the NSE made a negative closing. CNX Realty down 2.47%, CNX Metal down 2.46%, CNX Infra down 1.53% and CNX PSE down 0.89%. While, CNX Pharma up by 0.19% and CNX Finance up by 0.10%. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, down by 2.77% and reached 13.67.

The India VIX witnessed contraction of 2.77% at 13.67 as compared to its previous close of at 14.06 on Friday.

The 50-share CNX Nifty lost 21.20 points or 0.37% to settle at 5,698.50.

Nifty March 2013 futures closed at 5716.85 on Monday at a premium of 18.35 points over spot closing of 5,698.50, while Nifty April 2013 futures ended at 5744.95, at a premium of 46.45 points over spot closing. Nifty March futures saw an addition of 1.22 million (mn) units taking the total outstanding open interest (OI) to 16.53 mn units. The near month March 2013 derivatives contract will expire on March 28, 2013.

From the most active contracts, NHPC March 2013 futures were trading flat compared with spot closing of 19.70. The number of contracts traded was 27,903.

JP Associates March 2013 futures were trading at a premium of 0.65 points at 68.60 compared with spot closing of 67.95. The number of contracts traded was 13,127.

Tata Motors March 2013 futures were trading at a discount of 0.30 points at 290.15 compared with spot closing of 290.45. The number of contracts traded was 11,425.

DLF March 2013 futures were at a premium of 1.50 points at 252.10 compared with spot closing of 250.60. The number of contracts traded was 19,200.

Reliance Industries March 2013 futures were at a premium of 5.15 points at 817.25 compared with spot closing of 812.10. The number of contracts traded was 14,604.

Among Nifty calls, 6,000 SP from the March month expiry was the most active call with an addition of 0.37 million open interest.

Among Nifty puts, 5,700 SP from the March month expiry was the most active put with an addition of 0.41 million open interest.

The maximum OI outstanding for Calls was at 6000 SP (6.23 mn) and that for Puts was at 5,700 SP (7.13mn).

The respective Support and Resistance levels are: Resistance 5719.13-- Pivot Point 5691.37 -- Support 5670.73.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.01 for March -month contract.

The top five scrips with highest PCR on OI were Kotak Bank 4.61, Colpal 4.00, JSW Energy 2.33, Adani Ports 1.73, and TCS 1.53.

Among most active underlying, NHPC witnessed contraction of 9.37 million of Open Interest in the March month futures contract followed by Jaiprakash Associates which witnessed an addition of 2.70 million of Open Interest in the near month contract. Meanwhile, IFCI witnessed of contraction of 1.84 million in the March month futures. Also, Unitech witnessed contraction of 2.12 million in Open Interest in the March month contract. Finally, RCOM witnessed contraction of 0.58 million of Open Interest in the near month futures contract.