Nifty ends lower amid political uncertainty

CNX Nifty ended lower for a seventh consecutive session on Monday as investors remain concerned over the political instability in the country, that other allies would remove support from the ruling coalition after the DMK party withdrew last week. On the global front, most of the Asian market closed in green. Moreover, European market also made a gap-up start in the early deals on Monday. 

Back home, buoyed by firm global cues, Indian equity market made a gap-up start with inching towards its crucial 5,700 levels. The US markets rebounded in late trade to finish higher on Friday on hopes that Cyprus will find a solution to avert the default. In the first half, market traded in green, supported by buying in Oil and Gas counter after Petroleum Minister M Veerappa Moily said that the Prime Minister-headed Cabinet Committee on Investments would take up 31 oil and gas blocks stuck for clearances in ‘two-weeks’. Some support also came after the Finance Minister P Chidambaram’s assurance that the government will ease restrictions for foreign institutional investors in government and corporate bonds next month to attract inflows, which will help to fund a widening current account deficit. However, in the late afternoon session, market pared gains and slipped into red, amid concerns of political uncertainty in country. Political bluster by Samajwadi Party made market participants nervous over the fate of Congress-led UPA government amid lack of support from its key political allies. Selling was witnessed in banking, metal, infra and FMCG stocks. Finally, Nifty ended the session with a loss of 17 points.

Meanwhile, sectoral indices on the NSE made a mixed closing. CNX PSU Bank down 1.47%, CNX Metal down 1.13%, CNX Auto down 0.86%, CNX Infra down 0.52% and CNX FMCG down 0.49% remained the top losers in the trade. While, CNX PSE up by 1.03%, CNX Realty up by 0.94%, CNX Media up by 0.59% and CNX Energy up by 0.56% remained the gainers in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, down by 5.28% and reached 16.36.

The India VIX witnessed an addition of 5.28% at 16.36 as compared to its previous close of at 15.54 on Friday.

The 50-share CNX Nifty lost 17.50 points or 0.31% to settle at 5,633.85.

Nifty March 2013 futures closed at 5,645.05 on Monday at a premium of 11.20 points over spot closing of 5,633.85, while Nifty April 2013 futures ended at 5,684.00, at a premium of 50.15 points over spot closing. Nifty March futures saw contraction of 0.28 million (mn) units taking the total outstanding open interest (OI) to 13.19 mn units. The near month March 2013 derivatives contract will expire on March 28, 2013.

From the most active contracts, BHEL April 2013 futures were trading at a discount of 2.40 points at 176.65 compared with spot closing of 179.05. The number of contracts traded was 15,270.

Tata Motors March 2013 futures were trading at a discount of 0.65 points at 270.65 compared with spot closing of 271.30. The number of contracts traded was 14,056.

BHEL March 2013 futures were trading at a premium of 0.80 points at 179.85 compared with spot closing of 179.05. The number of contracts traded was 17,821.

DLF March 2013 futures were at a discount of 0.30 points at 242.30 compared with spot closing of 242.60. The number of contracts traded was 23,781. 

Reliance Industries March 2013 futures were at a premium of 2.40 points at 809.30 compared with spot closing of 806.90. The number of contracts traded was 19,690.

Among Nifty calls, 6,000 SP from the March month expiry was the most active call with contraction of 0.50 million open interest.

Among Nifty puts, 5,700 SP from the March month expiry was the most active put with contraction of 0.26 million open interest.

The maximum OI outstanding for Calls was at 6000 SP (8.47 mn) and that for Puts was at 5,700 SP (7.59mn).

The respective Support and Resistance levels are: Resistance 5693.37 -- Pivot Point 5658.88-- Support 5599.37.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.73 for March -month contract.

The top five scrips with highest PCR on OI were Sun Pharma 2.06, TCS 1.84, Asian Paint1.68, HDFC Bank 1.58 and Divislab 1.54.

Among most active underlying, Jaiprakash Associates witnessed contraction of 6.16 million of Open Interest in the March month futures contract followed by Unitech which witnessed contraction of 0.71 million of Open Interest in the near month contract. Meanwhile, IFCI witnessed of contraction of 10.83 million in the March month futures. Also, RCOM witnessed contraction of 11.54 million in Open Interest in the March month contract. Finally, GMR Infrastructure witnessed a contraction of 0.89 million of Open Interest in the near month futures contract.