Nifty ends below crucial 6,000 level as rate cut hope dims

CNX Nifty came under tremendous selling pressure on Friday weighed down by risk sensitive stocks after the RBI Governor’s statement that containing the upside risks to inflation and current account deficit will remain the central bank’s priority, which dashed hopes of a rate cut by the central bank at its policy review in June. Further, major fall in rupee value against the dollar also dented the investors’ sentiments. On the global front, Asian markets ended the session mostly in red terrain. Meanwhile, European markets made weak opening on Friday.

Back home, Indian equity benchmark made a negative start to the June F&O series with tumbling below the crucial 6,000 level. In the first half, market traded in negative territory as the sentiments remain dampened after the RBI governor warned of upside risks to inflation and expressed worry over the country’s high current account deficit. Market continued weak trade despite the country’s Gross domestic product (GDP), a measure of the country's total economic output, expanded at a 4.8% for the fourth quarter ended March 31, 2013, much in-line with the expectation and better than revised 4.7% growth in the previous quarter. In the second half too, market extended its losses and continued weak trade till the end, ignoring the better-than-expected fiscal deficit data for FY13. India’s fiscal deficit for previous fiscal came at 4.89% of GDP, which is lower than the budget estimate of 5.2%. Moreover, the negative start of the European markets also turned down investors’ sentiments. Selling was witnessed in all major indices of market except IT. Finally, Nifty ended the session near its intra-day low with a massive loss of 138 points.   

Meanwhile, sectoral indices on the NSE made a negative closing except IT. CNX Realty down 3.61%, CNX PSU Bank down 3.09%, CNX Metal down 2.49%, CNX Media down 2.28% and CNX Infra down 2.19% remained the top losers in the trade. While CNX IT up by 1.28% remained the only gainer of the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, up by 5.92% and reached 16.99.

The India VIX witnessed an addition of 5.92% at 16.99 as compared to its previous close of at 16.04 on Thursday. The 50-share CNX Nifty lost 138.10 points or 2.26% to settle at 5,985.95.

Nifty June 2013 futures closed at 6000.05 on Friday at a premium of 14.10 points over spot closing of 5985.95, while Nifty July 2013 futures ended at 6016.55, at a premium of 30.60 points over spot closing. Nifty June futures saw contraction of 2.42 million (mn) units taking the total outstanding open interest (OI) to 15.16 mn units. The near month June 2013 derivatives contract will expire on June 27, 2013.

From the most active contracts, Tata Motors June 2013 futures were trading at a premium of 1.45 points at 315.40 compared with spot closing of 313.95. The number of contracts traded was 16,962.

Tata Steel June 2013 futures were trading at a premium of 1.35 points at 293.45 compared with spot closing of 292.10. The number of contracts traded was 14,580.

DLF June 2013 futures were trading at a discount of 0.60 points at 196.00 compared with spot closing of 196.60. The number of contracts traded was 21,576.

Reliance Industries June 2013 futures were at a premium of 6.75 points at 811.75 compared with spot closing of 805.00. The number of contracts traded was 15,532. 

Opto Circuits June 2013 futures were at a discount of 0.45 points at 30.95 compared with spot closing of 31.40. The number of contracts traded was 16,144. 

Among Nifty calls, 6,200 SP from the June month expiry was the most active call with an addition of 0.84 million open interest.

Among Nifty puts, 6,000 SP from the June month expiry was the most active put with contraction of 0.01 million open interest.

The maximum OI outstanding for Calls was at 6,200 SP (4.01 mn) and that for Puts was at 6,000 SP (5.02 mn).

The respective Support and Resistance levels are: Resistance 6069.62-- Pivot Point 6022.58-- Support 5938.92.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.14 for June -month contract.

The top five scrips with highest PCR on OI were Grasim 1.70, Bharat Forg 1.38, Tata Chemical 1.20, Siemens 1.17 and Finan Tech 1.11.

Among most active underlying, Unitech witnessed an addition of 3.43 million of Open Interest in the June month futures contract followed by JP Associates which witnessed contraction of 0.95 million of Open Interest in the near month contract. Meanwhile, GMR Infrastructure witnessed an addition of 0.26 million in the June month futures. Also, HDIL witnessed an addition of 5.73 million in Open Interest in the June month contract. Finally, Reliance Power witnessed an addition of 0.32 million of Open Interest in the near month futures contract.