Nifty snaps four-day rally; pharma stocks take hit

CNX Nifty snapping four session’s winning streak, ended lower on Monday amid selling in pharma shares on worries that the new price control will sharply reduce drug prices thereby impacting growth and profitability. Sentiments also remained cautious after Standard & Poor's on May 17 warned that there is at least a one-in-three likelihood of a downgrade within the next 12 months. On the global front, Asian shares closed higher. Meanwhile, European markets also made a positive opening in early deals on Monday.

Back home, buoyed by firm global cues, Indian equity indices made a positive start. The US markets closed higher in previous session on the back of some good economic data. In the first half, market traded in positive territory as FIIs continued to pump in dollars on hopes of improvement in macroeconomic situation along with softening of crude oil, gold prices and inflation. Market continued its positive trade amid sustained buying in several blue chip stocks from across various sectors on hopes of further monetary easing by the central bank. However, in the late afternoon session, marked pared all its early gains and slipped into negative territory as traders resorted to book profits in heavyweight stocks after the index hit 31-month high mark. Selling was witnessed in Pharma, PSE, energy, finance and realty stocks. Finally, Nifty ended the session with a loss of 30 points.    

Meanwhile, sectoral indices on the NSE made a mixed closing. CNX Pharma down 1.83%, CNX PSE down 1.01%, CNX Energy down 0.93%, CNX Finance down 0.84% and CNX Infra down 0.81% remained the top losers in the trade. While, CNX auto up by 0.88%, CNX IT up by 0.44%, CNX Media up by 0.10% and CNX Metal up by 0.05% remained the gainers in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, up by 0.80% and reached 17.71.

The India VIX witnessed an addition of 0.80 % at 17.71 as compared to its previous close of at 17.57 on Friday. The 50-share CNX Nifty lost 30.40 points or 0.49% to settle at 6,156.90.

Nifty May 2013 futures closed at 6164.85 on Monday at a premium of 7.95 points over spot closing of 6156.90, while Nifty June 2013 futures ended at 6173.65, at a premium of 16.75 points over spot closing. Nifty May futures saw an addition of 0.11 million (mn) units taking the total outstanding open interest (OI) to 25.76 mn units. The near month May 2013 derivatives contract will expire on May 30, 2013.

From the most active contracts, Reliance Communications May 2013 futures were trading at a premium of 0.20 points at 113.30 compared with spot closing of 113.10. The number of contracts traded was 11,408.

Tata Motors May 2013 futures were trading at a premium of 0.65 points at 303.30 compared with spot closing of 302.65. The number of contracts traded was 17,346.

DLF May 2013 futures were trading at a discount of 0.70 points at 248.05 compared with spot closing of 248.75. The number of contracts traded was 18,281.

Reliance Industries May 2013 futures were at a premium of 2.85 points at 834.70 compared with spot closing of 831.85. The number of contracts traded was 21,904. 

Reliance Capital May 2013 futures were at a premium of 0.15 points at 382.00 compared with spot closing of 381.85. The number of contracts traded was 19,586.

Among Nifty calls, 6,200 SP from the May month expiry was the most active call with contraction of 0.39 million open interest.

Among Nifty puts, 6,000 SP from the May month expiry was the most active put with contraction of 0.64 million open interest.

The maximum OI outstanding for Calls was at 6,200 SP (7.13 mn) and that for Puts was at 6,000 SP (7.72 mn).

The respective Support and Resistance levels are: Resistance 6208.88 -- Pivot Point 6177.47 -- Support 6125.48.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.40 for May-month contract.

The top five scrips with highest PCR on OI were Kotak Bank 2.08, Siemens 1.43,Axis Bank 1.39 ,Bharti Airtel 1.32, HUL 1.32.

Among most active underlying, Unitech witnessed contraction of 4.05 million of Open Interest in the May month futures contract followed by Jaiprakash Associates which witnessed contraction of 2.20 million of Open Interest in the near month contract. Meanwhile, R com witnessed contraction of 0.63 million in the May month futures. Also, IFCI witnessed an addition of 0.48 million in Open Interest in the May month contract. Finally, R Power witnessed contraction of 0.38 million of Open Interest in the near month futures contract.