Nifty ends below crucial 5,800 level amid weak global cues, rupee fall

CNX Nifty fell for the second straight day and ended around 1.5% below previous day's close on Wednesday amid weak global cues and selling witnessed in banking shares after the Reserve Bank of India (RBI) proposed to impose an incremental provisions and capital requirements on banks, which lend to corporate having unhedged forex exposure. Further, fall in the rupee value against dollar also dented the investors’ sentiments. On global front, Asian markets ended the trade in the red as sentiment remained dampened after activity in China’s services sector stayed lackluster in June. Meanwhile, European markets made a negative opening in the early deals on Wednesday.

Back home, Indian equity benchmarks made a gap-down opening, drifting towards crucial 5,800 level pressurized by weak global leads as the US markets ended lower in the previous session. In the first half, markets traded in the negative territory as investors lost confidence after India’s HSBC services Purchasing Managers’ Index (PMI), based on a survey of around 400 companies, fell from May’s three-month high of 53.6 to 51.7 in June. Sentiments also got clobber after Indian Rupee again slipped over 60 per dollar mark amid rising fear of high current account deficit (CAD). Markets extended their losses further and continued their negative trade till the end of session on account of selling in frontline blue chip counters and taking cues from European counterparts. Selling was witnessed in banking, realty and finance stocks. Finally, Nifty ended the session near its intra-day low level with a massive loss of 86 points.   

Meanwhile, sectoral indices on the NSE made a negative closing. CNX PSU Bank down 5.16%, CNX Realty down 4.93%, CNX Metal down 2.78%, CNX PSE down 2.62% and CNX Energy down 2.57% remained the top losers in the trade. While, CNX Pharma up by 0.55% and CNX FMCG up by 0.36% remained the gainers in the trade.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, down 3.84% and reached 18.91. The India VIX witnessed an addition of 3.84% at 18.91 as compared to its previous close of at 18.21 on Tuesday. The 50-share CNX Nifty lost 86.65 points or 1.48% to settle at 5,770.90.

Nifty July 2013 futures closed at 5767.85 on Wednesday at a discount of 3.05 points over spot closing of 5770.90, while Nifty August 2013 futures ended at 5791.50 at a premium of 20.60 points over spot closing. Nifty July futures saw contraction of 0.33 million (mn) units taking the total outstanding open interest (OI) to 14.75 mn units. The near month July 2013 derivatives contract will expire on July 25, 2013.

From the most active contracts, Unitech July 2013 futures were trading at a discount of 0.05 points at 20.50 compared with spot closing of 20.55. The number of contracts traded was 11,114.

JP Associates July 2013 futures were trading at a discount of 0.20 points at 51.75 compared with spot closing of 51.95. The number of contracts traded was 18,505.

Reliance Communications July 2013 futures were at a discount of 1.35 points at 130.05 compared with spot closing of 131.40. The number of contracts traded was 20,559. 

Tata Motors July 2013 futures were at a premium of 1.10 points at 285.20 compared with spot closing of 284.10. The number of contracts traded was 14,123. 

Hindustan Unilever July 2013 futures were trading at a discount of 3.55 points at 582.95 compared with spot closing of 586.50. The number of contracts traded was 13,811.

Among Nifty calls, 6,000 SP from the July month expiry was the most active call with an addition of 0.41 million open interest.

Among Nifty puts, 5,600 SP from the July month expiry was the most active put with an addition of 0.09 million open interest.

The maximum OI outstanding for Calls was at 6,000 SP (6.61 mn) and that for Puts was at 5,600 SP (6.69 mn).

The respective Support and Resistance levels are: Resistance 5803.8 -- Pivot Point 5782.1 -- Support 5749.2. The Nifty Put Call Ratio (PCR) OI wise stood at 1.22 for July -month contract. The top five scrips with highest PCR on OI were Sesa Goa 2.94, MC Dowell-N 1.61, GAIL 1.51, Syndicate Bank 1.38 and Siemens 1.33.

Among most active underlying, Unitech witnessed an addition of 1.44 million of Open Interest in the July month futures contract followed by IFCI which witnessed an addition of 0.23 million of Open Interest in the near month contract. Meanwhile, JP Associates witnessed an addition of 3.10 million in the July month futures. Also, RCom witnessed contraction of 0.42 million in Open Interest in the July month contract. Finally, Reliance Power witnessed contraction of 0.52 million of Open Interest in the near month futures contract.