Weak global cues rattle market again; Nifty breaches 4,850 mark

The fifty stock index -- Nifty -- continued its southward journey for second consecutive day on Monday and finished the choppy day of trade with a cut of about two percent after witnessing bloodbath throughout the day on the back of weak cues from global peers. Earlier, the Indian equity market made a gap down start on the back of weak cues from global equity indices. Moreover, Nifty breached its crucial 4,900 mark in early trade, with heavy selling in stocks like Reliance Industries, HDFC, HDFC Bank, ICICI Bank and Hindalco. Meanwhile, metal shares fell across the board, with Hindalco Industries, Sterlite Industries and Tata Steel hitting 52-week lows as global commodity prices fell on global economic worries while, realty stocks fell on worries of higher interest rates could dent demand for residential and commercial properties. However, the index pared some of their losses supported by Anil Dhirubhai Ambani Group (ADAG) companies' stocks and scrip like, RCom, Reliance Capital, Reliance Power and Reliance Infra all edged higher as the CBI, probing the 2G scam had said that it has no evidence of RADAG Chairman Anil Ambani’s direct involvement in the structuring of different companies and transfer of funds relating to Swan Telecom. But, weak opening in European counterparts extended nervousness in the market and the index touched intraday low in early noon trade. Moreover, airline stocks dropped after state-owned oil marketing companies on September 30, 2011, hiked jet fuel price by 1.5% as falling rupee made oil imports costlier. However, PSU oil marketing companies limited the cut and stocks like BPCL, HPCL and IOC rose by 2-4 percent in the trade. Finally, Nifty ended the sluggish day of trade with a cut of about two percentage point tad below its crucial 4,850 mark.

On the global front, the US markets slumped on Friday on concern of global economic recovery and despite some good economic reports while, all the Asian equity indices witnessed massacre in today’s trade and ended the session with a huge cut on Monday as investors remained worried over growing concerns about a debt default in Greece. Moreover, all the European counterparts were trading in the red where, major indices like DAX and FTSE all were witnessing cut of over two percent at this point of time. Back home, all the sectoral indices on the NSE settled in the negative territory with CNX Realty losing the most, ending with a cut of about five and half a percent followed by CNX Metal down by 3.99% and Bank Nifty down by 2.98% on NSE sectoral space. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 9.79% and reached 35.07, while S&P Nifty dropped by 93.75 points or 1.90% to close at 5,849.50.

The India VIX added 9.79% at 35.07 as compared to its previous close of 31.94 on Friday. 

The 50-share S&P CNX Nifty lost 93.75 points or 1.90% and settled at 4,849.50.

Nifty October 2011 futures closed at 4,867.60 at a premium of 18.10 points over spot closing of 4,849.50, while Nifty November 2011 futures were at 4,879.00 at a premium of 29.50 points over spot closing. The near month October 2011 derivatives contract expires on Thursday, October 25, 2011. Nifty October futures saw addition of 11.51% or 2.26 million (mn) units, taking the total outstanding open interest (OI) to 21.90 mn units.

From the most active contract by contract value, SBI's October 2011 futures were at a discount of 2.25 point at 1861.05 compared with spot closing of 1863.30. The number of contracts traded was 20,438.

L&T October 2011 futures were at a premium of 4.55 point at 1324.65 compared with spot closing of 1320.10. The number of contracts traded was 12,113.

RIL October 2011 futures were at a premium of 4.25 point at 790.70 compared with spot closing of 786.45. The number of contracts traded was 18,164.

ICICI Bank October 2011 futures were at a premium of 1.30 point at 839.60 compared with spot closing of 838.30. The number of contracts traded was 16,233.

Infosys October 2011 futures were at a discount of 4.80 point at 2473.00 compared with spot closing of 2477.80. The number of contracts traded was 9,534.

Among Nifty calls, 5000 SP from the September month expiry was the most active call with contraction of 0.31 million or 8.53%.

Among Nifty puts, 4700 SP from the September month expiry was the most active put with addition of 1.41 million or 24.58%.

The maximum Call OI outstanding for Calls was at 5000 SP (3.93 mn) and that for Puts was at 4700 SP (7.11mn).

The respective Support and Resistance levels are: Resistance 4877.80 -- Pivot Point 4850.85-- Support 4822.55.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.64 for October -month contract.

The top five scrips with highest PCR on OI were Punjab National Bank 2.50, Siemens 2.30, TCS 1.05, Sun Pharmaceuticals 1.03 and The India Cements 1.00.

Among most active underlying, SBI witnessed an addition of 7.69% of Open Interest (OI) in the October month futures contract followed by RIL witnessed an addition of 5.09% of Open Interest (OI) in the near month contract. Meanwhile JSW Steel witnessed an addition of 5.52% of OI in the October month futures. Also, Tata Steel witnessed a addition of 9.01% of Open Interest (OI) in the October month contract followed by L&T witnessed an addition of 5.53% of Open Interest (OI) in the October month contract.