Nifty ends below crucial 5,700 level on Fed stance, weak rupee

CNX Nifty witnessing its steepest fall since February 2012, ended lower on Thursday after the US Federal Reserve signaled a tapering of its monetary stimulus, stoking fears of portfolio outflows. Further, weak China manufacturing data and continued fall in the rupee value also dented the investor sentiments. On the global front, Asian markets shut shop in red. Meanwhile, European counters also made a negative opening in early deals on Thursday.

Back home, Indian equity benchmark made a gap-down opening pressurized by feeble global cues with tumbling below crucial 5,700 level. Overnight, the US markets slumped by over a percent on account of negative reaction to the Federal Reserve’s monetary policy announcement that it may end bond purchases next year if the economy strengthens in-line with forecasts. In the first half, market traded in red amid weak global cues. The major fall in rupee value to a record low of 59.93 per dollar also dampened the sentiments. Investors also remain concerned over the report that the foreign direct investment (FDI) in India declined by six percent to $5.47 billion during January-March quarter of the current calendar year. Market extended its losses and continued its weak trade till the end, on account of selling in frontline blue chip counters and taking cues from European counterparts. Selling was witnessed in all major indices of the market. Finally, Nifty ended the session near its intra-day low level with a massive loss of 166 points. 

 Meanwhile, the sectoral indices on the NSE made a negative closing. CNX Realty down 5.35%, CNX Metal down 4.55%, CNX PSU Bank down 4.03%, CNX Finance down 3.71% and CNX Infra down 3.25% remained the losers in the trade. While, India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, up by 3.95% and reached 19.19.

The India VIX witnessed an addition of 3.95% at 19.19 as compared to its previous close of at 18.46 on Wednesday. The 50-share CNX Nifty gained 166.35 points or 2.86% to settle at 5,655.90.

Nifty June 2013 futures closed at 5648.45 on Thursday at a discount of 7.45 points over spot closing of 5655.90, while Nifty July 2013 futures ended at 5668.10, at a premium of 12.20 points over spot closing. Nifty June futures saw an addition of 2.99 million (mn) units taking the total outstanding open interest (OI) to 21.53 mn units. The near month June 2013 derivatives contract will expire on June 27, 2013.

From the most active contracts, JP Associates June 2013 futures were trading at a premium of 0.15 points at 58.85 compared with spot closing of 58.70. The number of contracts traded was 13,820.

Reliance Communications June 2013 futures were at a discount of 0.45 points at 123.45 compared with spot closing of 123.90. The number of contracts traded was 18,993. 

Tata Motors June 2013 futures were at a premium of 2.15 points at 288.15 compared with spot closing of 286.00. The number of contracts traded was 15,879. 

DLF June 2013 futures were trading at a premium of 0.65 points at 176.15 compared with spot closing of 175.50. The number of contracts traded was 26,930.

Tata Steel June 2013 futures were trading at a premium of 1.60 points at 272.40 compared with spot closing of 270.80. The number of contracts traded was 18,287.

Among Nifty calls, 5,800 SP from the June month expiry was the most active call with an addition of 2.90 million open interest.

Among Nifty puts, 5,600 SP from the June month expiry was the most active put with an addition of 1.63 million open interest.

The maximum OI outstanding for Calls was at 5,800 SP (8.48 mn) and that for Puts was at 5,600 SP (7.46 mn).

The respective Support and Resistance levels are: Resistance 5725.38 -- Pivot Point 5685.52 -- Support 5616.03.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.80 for June -month contract.

The top five scrips with highest PCR on OI were Dabur 1.14, Bajaj-Auto 1.10, Ambuja Cement 1.08, Exide Ind 1.07, and Federal Bank 1.00. Among most active underlying, Unitech witnessed an addition of 1.97 million of Open Interest in the June month futures contract followed by JP Associates which witnessed  an addition of 0.88 million of Open Interest in the near month contract. Meanwhile, Reliance Communications witnessed an addition of 0.58 million in the June month futures. Also, IFCI witnessed an addition of 4.65 million in Open Interest in the June month contract. Finally, RPower witnessed contraction of 0.48 million of Open Interest in the near month futures contract.