Nifty ends below crucial 5,550 level; CNX-IT index slips over 11%

CNX Nifty ended lower on Friday on the back of significant selling witnessed in Information Technology index after Infosys guided for a weak revenue outlook for fiscal 2014. CNX-IT index slumped over 11 percent after Infosys projected a lower revenue growth of 6-10% for the FY14, much below the Nasscom’s estimate of 12-14% for the fiscal, and raised concerns about the outlook for the software services exporting sector. Moreover, weak global cues also added to the market’s loss. Asian counters too shut shop mostly in red as signs of tensions in the Korean peninsula dented the investors’ sentiments. While, European markets traded choppy in the early trade on Friday.

Back home, Indian equity benchmark made a gap down start on Friday with tumbling below its crucial 5,550 mark, dragged down by disappointing fourth quarter earnings from Infosys and lower growth guidance for FY14. Market continued its weak trade despite the annual rate of inflation based on the consumer prices index (CPI), eased in the month of March to 10.39%, thereby strengthening the case for rate cut in RBI’s upcoming monetary policy review. Moreover, India's annual industrial output growth grew by 0.6% for the month of February 2013, which was higher than the street’s expectation of negative number, failed to improve the market sentiments. Market remained volatile even on positive macro-economic data. In the late afternoon session also, market continued its weak trade, on account of selling in frontline counters and taking cues from European counterparts. Selling was witnessed in IT, service, media and auto stocks. Finally, Nifty ended the session with a massive loss of 65 points.

Meanwhile, sectoral indices on the NSE made a mixed closing. CNX IT down 11.74%, CNX Media down 0.71% CNX Auto down 0.63% and CNX Realty down 0.20% remained the top losers in the trade. While, CNX FMCG up by 1.91%, CNX Finance up by 0.75%, CNX Energy up by 0.70% and CNX PSE 0.41% remained the gainers in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, down 3.06% and reached 16.45.

The April series options’ OIPCR stood at 0.88 indicating bearish sentiments in the markets, 5400, 5500, and 5600 April series Put Options shed 254,800, 639,750 and 662,700 shares in the open interest taking their tally to 6,833,350, 6,728,550 and 5,630,750 respectively.

5600, 5700 and 5800 April series Call Options added 1,320,700, 642,200 and 336,850 shares in the open interest taking their tally to 7,135,250, 8,088,000 and 7,309,350 respectively.

The put writers made losses at 5500 Puts on the last day of the week as they squared off 6.4 lakh shares in the open interest, the presence of 68 and 67 lakh shares in the open interest at the 5400 and 5500 levels respectively in the Put series indicates minor support levels at 5500 levels on the Nifty, whereas the 5700 levels would try to resist the markets to rise any further.

The India VIX witnessed contraction of 3.06% at 16.45 as compared to its previous close of at 16.97 on Thursday.

The 50-share CNX Nifty lost 65.45 points or 1.17% to settle at 5,528.55.

Nifty April 2013 futures closed at 5,535.20 on Friday at a premium of 6.65 points over spot closing of 5,528.55, while Nifty May 2013 futures ended at 5,553.45, at a premium of 24.90 points over spot closing. Nifty April futures saw an addition of 0.40 million (mn) units taking the total outstanding open interest (OI) to 20.23 mn units. The near month April 2013 derivatives contract will expire on April 25, 2013.

From the most active contracts, JP Associates April 2013 futures were trading at a premium of 0.20 points at 70.80 compared with spot closing of 70.60. The number of contracts traded was 13,915.

Reliance Communications April 2013 futures were trading at a premium of 0.35 points at 77.90 compared with spot closing of 77.55. The number of contracts traded was 13,231.

DLF April 2013 futures were trading at a premium of 0.25 points at 247.25 compared with spot closing of 247.00. The number of contracts traded was 12,541.

ICICI Bank April 2013 futures were at a premium of 2.80 points at 1045.00 compared with spot closing of 1042.20. The number of contracts traded was 13,081. 

Reliance Industries April 2013 futures were at a premium of 3.30 points at 778.30 compared with spot closing of 775.00. The number of contracts traded was 12,106.

Among Nifty calls, 5,700 SP from the April month expiry was the most active call with an addition of 0.58 million open interest.

Among Nifty puts, 5,500 SP from the April month expiry was the most active put with contraction  of 0.76 million open interest.

The maximum OI outstanding for Calls was at 5700 SP (8.03 mn) and that for Puts was at 5,500 SP (6.59 mn).

The respective Support and Resistance levels are: Resistance 5550.4 -- Pivot Point 5522.65 -- Support 5500.8.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.87 for April -month contract.

The top five scrips with highest PCR on OI were Aurobindo Pharma 1.91, HDFC Bank 1.79, Maruti 1.40, Arvind 1.24 and Sun Pharma 1.24.

Among most active underlying, JP Associates witnessed an addition of 1.12million of Open Interest in the April month futures contract followed by Unitech which witnessed contraction of 0.31 million of Open Interest in the near month contract. Meanwhile, Shree Renuka Sugars witnessed an addition of 0.56 million in the April month futures. Also, Rcom witnessed contraction of 2.19 million in Open Interest in the April month contract. Finally, R power Industries witnessed contraction of 0.22 million of Open Interest in the near month futures contract.