Nifty ends below 4,950 mark tracking weak European counterparts

The fifty stock index -- Nifty -- witnessed massacre in the second half of trade and snapped the session with a cut of about one and a half percent breaching its crucial 4,950 level on the back of weak cues from European markets, while the plunge in Anil Dhirubhai Ambani Group (ADAG) companies too dampened the sentiments. Earlier, the Indian equity market made a negative start as investors booked their profits recorded in the previous session amid a weak trend in global equity indices. The Nifty breached its crucial 5,000 level in opening trade as sentiment remained weak as all ADA Group’s stocks remained extremely under selling pressure. Stocks like Reliance Capital, Reliance Infra, Reliance Power and RCom were down by 3.5-13 percent in the trade as the CBI has informed the Supreme Court that it is probing the alleged involvement of Anil Ambani in the 2G scam. Afterwards market pared all its losses and touched green land drawing support from reports of Germany approval to expand the euro zone bailout fund and traded near neutral line till late noon. Afterwards, the benchmark started its south wards journey as European counterparts opened on a weak note because approval of European Financial Stability Facility (EFSF) expansion by Germany yesterday has not soothed investors’ sentiment. Meanwhile, mining stocks gave a mixed response as the Union Cabinet approved a new mining bill that calls for coal miners to share a maximum 26% of their profits with local communities and for other miners an amount equivalent to royalties. After that, the local index breached its crucial 4,950 mark in the mid noon trade and ended the trade near its intraday low as cut in European markets got deeper. Finally, Nifty snapped the sluggish day of trade with a cut of about one and half a percentage point as selling witnessed in frontline stocks like ONGC, TCS, ITC, Wipro, SBI, ICICI Bank, NTPC, BHEL and HDFC.

On the global front, The US markets made a mixed closing after a volatile day of trade overnight while, Most of the Asian equity indices ended the trade in the negative terrain on last trading day of the week as cautious traders shrugged off strong US growth data and German approval of a crucial EU bailout package. Moreover, European counterparts were trading in the negative terrain where major indices CAC, DAX and FTSE all were down by 1-3 percent at this point of time. Back home, all the sectoral indices on the NSE were hammered badly, CNX Realty remained the major loser, down 2.16% followed by CNX PSU Bank down 1.95% and Bank Nifty down by 1.92% in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 2.80% and reached 31.94, while S&P Nifty closed at 4,943.25 losing 72.20 points or 1.44%.

The India VIX added 2.80% at 31.94 as compared to its previous close of 31.07 on Thursday. 

The 50-share S&P CNX Nifty lost 72.20 points or 1.44% and settled at 4,943.25 .

Nifty October 2011 futures closed at 4,931.00 at a discount of 12.25 points over spot closing of 4,943.25, while Nifty November 2011 futures were at 4,944.00 at a premium of 0.75 points over spot closing. The near month October 2011 derivatives contract expires on Thursday, October 25, 2011. Nifty October futures saw addition of 11.92% or 2.30 million (mn) units, taking the total outstanding open interest (OI) to 21.64 mn units.

From the most active contract by contract value, SBI’s October 2011 futures were at a discount of 8.00 point at 1899.00 compared with spot closing of 1907.00. The number of contracts traded was 30,730.

RIL October 2011 futures were flat at 805.55 compared with spot closing of 805.55. The number of contracts traded was 34,589.

L&T October 2011 futures were at a premium of 4.80 point at 1361.75 compared with spot closing of 1356.95. The number of contracts traded was 17,400.

Reliance Capital October 2011 futures were at a premium of 1.15 point at 313.35 compared with spot closing of 312.20. The number of contracts traded was 27,465.

ICICI Bank October 2011 futures were at a discount of 1.00 point at 873.90 compared with spot closing of 874.90. The number of contracts traded was 19,491. Among Nifty calls, 5100 SP from the September month expiry was the most active call with contraction of 0.88 million or 39.75%.

Among Nifty puts, 4900 SP from the September month expiry was the most active put with addition of 0.64 million or 20.98%.

The maximum Call OI outstanding for Calls was at 5100 SP (3.13 mn) and that for Puts was at 4900 SP (3.74 mn).

The respective Support and Resistance levels are: Resistance 5004.43-- Pivot Point 4964.36-- Support 4903.18.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.58 for October -month contract.

The top five scrips with highest PCR on OI were Punjab National Bank 1.71, Siemens 1.67, BPCL 1.38, DLF 1.10 and Cipla 1.00.

Among most active underlying, RIL witnessed an addition of 2.83% of Open Interest (OI) in the October month futures contract followed by SBI witnessed an addition of 8.13% of Open Interest (OI) in the near month contract. Meanwhile Reliance Capital witnessed an addition of 22.94% of OI in the October month futures. Also, Tata Steel witnessed a addition of 12.55% of Open Interest (OI) in the October month contract followed by L&T witnessed an addition of 6.49% of Open Interest (OI) in the October month contract.