Weak global cues, fall in commodities price drags Nifty lower

The fifty stock index -- Nifty -- resumed its southbound journey after previous two day’s rally and ended the choppy day of trade with a cut of over 0.70 percent on the back of weak global cues and fall in commodities price. However, benchmark pared some of the intraday losses and snapped the day’s trade a tad above its crucial 5,550 mark as bottom fishing emerged at lower levels. Earlier, the Indian equity market made a gap down start tracking sluggish global cues while, investors remained cautious ahead of food inflation data that too dampened the sentiments in the early trade. In the mid morning trade, market started paring some of its initial losses as bargain hunting witnessed in some of the key heavyweights. Market pared some more losses after India’s food inflation declined to 8.06% for the week ended May 21 on the back of cheaper pulses, wheat and some vegetables. Afterwards, the local index traded in the tight band till mid afternoon trade as there is not much cues to support the market. But, selling pressure intensified in the last session of trade on the buzz of telecom probe against Dayanidhi Maran, textile minister and Anil Ambani, Chairman of Reliance ADAG (Anil Dhirubhai Ambani Group). The ADAG stocks slipped in the range of 2-5%, while Sun TV Network plunged about 28 percent today. Finally, Nifty snapped the day’s trade with a cut of about over 40 points and managed to end the trade just over its crucial 5,550 mark.

On the global front, the US markets plummeted overnight on getting weak economic data and all the major indices were down by over two percent for the day.  Most of the Asian equity indices finished the day’s trade in the negative terrain on Thursday as investors remained concerned about the global economic outlook. Moreover, all the European counterparts were trading in the negative terrain at this point of time. Back home, on the sectoral front, all the indices on NSE were hammered, Bank Nifty remained the major laggard, losing 1.76% followed by CNX Realty down 1.54%, CNX Infra 0.76% and CNX IT by 0.47%. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 7.47% and reached 17.98, while S&P Nifty closed at 5,550.35 losing 40.65 points or 0.74%.

The India VIX lost 7.47% at 17.98 on Thursday as compared to its previous close of 16.73 on Wednesday.  

The 50-share S&P CNX Nifty lost 41.65 points or 0.74% and settled at 5,550.35.

Nifty June 2011 futures closed at 5,563.00, at a premium of 12.65 points over spot closing of 5,550.35, while Nifty July 2011 futures were at 5,575.00 at a premium of 24.65 points over spot closing. The near month June 2011 derivatives contract expires on Thursday, June 30, 2011. Nifty June futures saw addition of 6.88% or 1.64 million (mn) units, taking the total outstanding open interest (OI) to 25.51 mn units.

From the most active underlying, SBI's June 2011 futures closed at a premium of 8.65 points at 2339.65 compared with spot closing of 2331.00. The number of contracts traded was 27,015.

Sun TV June 2011 futures were at a premium of 2.45 point at 273.25 compared with spot closing of 270.80. The number of contracts traded was 51,027.

Reliance Capital June 2011 futures were at a premium of 0.50 points at 512.00 compared with spot closing of 511.50. The number of contracts traded was 21,380.

Tata Motors June 2011 futures were at a premium of 4.70 at 1050.85 compared with spot closing of 1046.15. The number of contracts traded was 19,917.

ICICI Bank June 2011 futures were at a premium of 5.85 points at 1056.95 compared with spot closing of 1051.10. The number of contracts traded was 17,397.

The maximum Call OI outstanding was at 5600 SP (5.00mn) and that for Puts at 5400 SP (6.49mn).

The respective Support and Resistance levels are: Resistance 5571.71-- Pivot Point 5546.83-- Support 5525.46.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.44 for June -month contract.

The top five scrips with highest PCR on OI were Sintex - 5.00, Piramal Healthcare - 2.00, Sun Pharmaceuticals - 1.65, HCL Technologies- 1.13 and Punjab National Bank -1.03.

Among most active underlying, SUNTV witnessed an addition of 330.54% of Open Interest (OI) in the June month futures contract followed by State Bank of India (SBI) which added 7.74% of Open Interest (OI) in the near month contract. Meanwhile Tata Motors witnessed an addition of 8.98% of OI in the June month futures. Lastly, Reliance Communication witnessed an addition of 8.48% of OI in the June month futures.