Nifty ends below crucial 5,700 level amid political uncertainty

CNX Nifty ended lower for the fourth straight day on Wednesday, amid political uncertainty. The DMK's pullout from the ruling UPA coalition as well as the Cypriot parliament's decision to reject a bailout proposal weighed on investors’ sentiment. On the global front, most of the Asian markets closed in green. Meanwhile, European shares rose after three days of losses on Wednesday with investors optimistic that European policymakers would make sure the crisis in Cyprus did not spread to other countries.

Back home, Indian equity benchmark made a negative start amid weak global cues as the US markets mostly closed in red. In the first half of trade, market traded in red as investors remain worried over the concerns that the pace of economic reforms would slowdown after regional party DMK withdrew support from the UPA. Further, investors’ sentiments were also weighed down after Cyprus’ parliament overwhelmingly rejected a proposed tax on bank deposits as a condition for bailout aid, pushing the Mediterranean island a step closer to the brink of financial meltdown. Market continued its weak trade till the end on the back of selling in realty, PSU bank, infra and media stocks. Finally, Nifty ended the session with a loss of 51 points.  

Meanwhile, most of the sectoral indices on the NSE made a negative closing. CNX Realty down 5.12%, CNX PSU Bank down 3.44%, CNX Infra down 3.05%, CNX Media down 2.95% and CNX PSE down 2.11% remained the top losers in the trade. While, CNX FMCG up by 0.37%, CNX Pharma up by 0.11% and CNX IT up by 0.08% remained the gainers in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, down by 0.30% and reached 16.66.

The India VIX witnessed contraction of 0.30 % at 16.66 as compared to its previous close of at 16.71 on Tuesday.

The 50-share CNX Nifty lost 0.90 points or 51.55% to settle at 5,694.40.

Nifty March 2013 futures closed at 5,715.50 on Wednesday at a premium of 21.10 points over spot closing of 5,694.40, while Nifty April 2013 futures ended at 5,752.90, at a premium of 58.50 points over spot closing. Nifty March futures saw contraction of 0.93 million (mn) units taking the total outstanding open interest (OI) to 15.06 mn units. The near month March 2013 derivatives contract will expire on March 28, 2013.

From the most active contracts, JP Associates March 2013 futures were trading at a premium of 0.20 points at 68.85 compared with spot closing of 68.65. The number of contracts traded was 18,102.

HDIL March 2013 futures were trading at a discount of 2.25 points at 46.60 compared with spot closing of 48.85. The number of contracts traded was 29,144.

DLF March 2013 futures were trading at a premium of 0.95 points at 249.95 compared with spot closing of 249.00. The number of contracts traded was 28,393.

ICICI Bank March 2013 futures were at a discount of 0.65 points at 1005.95 compared with spot closing of 1006.60. The number of contracts traded was 21,715.

Reliance Industries March 2013 futures were at a premium of 4.25 points at 824.75 compared with spot closing of 820.50. The number of contracts traded was 16,431.

Among Nifty calls, 6,000 SP from the March month expiry was the most active call with contraction of 0.04 million open interest.

Among Nifty puts, 5,700 SP from the March month expiry was the most active put with contraction of 0.16  million open interest.

The maximum OI outstanding for Calls was at 6000 SP (9.94 mn) and that for Puts was at 5,700 SP (8.35mn).

The respective Support and Resistance levels are: Resistance 5732.37-- Pivot Point 5707.33-- Support 5669.37.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.89 for March -month contract.

The top five scrips with highest PCR on OI were Divis Lab 2.22, HDFC Bank 1.98, TCS 1.80, Asian Paints 1.77, and Sun Pharma 1.75. 

Among most active underlying, Unitech witnessed contraction of 3.62 million of Open Interest in the March month futures contract followed by JP Associates which witnessed contraction of 3.35 million of Open Interest in the near month contract. Meanwhile, IFCI witnessed of an addition of 0.28 million in the March month futures. Also, RCOM witnessed contraction of 1.12 million in Open Interest in the March month contract. Finally, Hindalco witnessed a contraction of 2.62 million of Open Interest in the near month futures contract.