Nifty continues southbound journey on second consecutive day

The fifty stock index -- Nifty -- continued its southbound journey on the second day in a row and ended the volatile day of trade with a cut of over half a percent. However, benchmark traded in the green in first half but, lost its track completely in the second half and snapped the day’s trade way below its crucial 5,550 mark. Earlier, the Indian equity market made a strong start and touched its intraday high crossing its crucial 5,600 mark on the back of rally in Reliance Anil Dhirubhai Ambani (ADA) Group stocks. Afterwards, the index traded firm till early noon trade as broad buying by funds and retail investors witnessed on report of foreign investors turning net buyers of the nation’s equities for a third time this year. The rally in Reliance Industries ahead of its 37th AGM (Annual General Meeting) too supported the sentiments. But, the AGM turned out into a damp squid and the Nifty surrendered all its morning gains and witnessed a sharp fall in the second half of the trade breaching its crucial 5,550 level due to absence of any major announcement by the Chairman Mukesh Ambani at the AGM which disappointed investors, moreover, fall in heavyweights like, TCS, NTPC, SBI, HDFC, ITC, BHEL and ONGC too dampened the sentiments. Meanwhile, ADAG companies viz., RCom, Reliance Capital, Reliance Infra and Reliance Power too pared some of their early gains but managed to close with a good gain after Central Bureau of Investigation (CBI) court on June 2, 2011, rejected a plea seeking a probe against Reliance ADA Group Chairman Anil Ambani in a case of alleged rigging of the sale of telecommunication licenses and bandwidth in 2008. Finally, Nifty snapped the day’s trade with a cut of more than half a percent near its intraday low.

On the global front, the US markets made a mixed closing overnight on reports of weaker than expected sales reports from retailers while, Asian equity indices finished the day’s trade on a mixed note on Friday as investors in the region remained on the safer side ahead of US jobs report. Moreover, most of the European counterparts were trading in the red where major indices like CAC and FTSE edged lower while, DAX was up in the trade at this point of time. Back home, on the sectoral front on NSE, CNX Realty remained the major laggard, losing 0.70% followed by Bank Nifty down 0.53% and CNX IT 0.17% while, CNX Infra gained 0.31% in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 2.05% and reached 17.61, while S&P Nifty closed at 5,516.75 losing 33.60 points or 0.61%.

The India VIX lost 2.05% at 17.61 on Friday as compared to its previous close of 17.98 on Thursday.  

The 50-share S&P CNX Nifty lost 33.60 points or 0.61% and settled at 5,516.75.

Nifty June 2011 futures closed at 5,533.80, at a premium of 17.05 points over spot closing of 5,516.75, while Nifty July 2011 futures were at 5,546.40 at a premium of 29.65 points over spot closing. The near month June 2011 derivatives contract expires on Thursday, June 30, 2011. Nifty June futures saw addition of 6.11% or 1.48 million (mn) units, taking the total outstanding open interest (OI) to 25.79 mn units.

From the most active underlying, RIL June 2011 futures closed at a premium of 6.00 points at 942.00 compared with spot closing of 936.00. The number of contracts traded was 32,222.

Tata Motors June 2011 futures were at a premium of 5.30 point at 1029.90 compared with spot closing of 1024.60. The number of contracts traded was 27,938.

SBI's June 2011 futures were at a premium of 7.40 points at 2326.40 compared with spot closing of 2319.00. The number of contracts traded was 21,309.

Sun TV June 2011 futures were at a premium of 0.30 at 285.50 compared with spot closing of 285.20. The number of contracts traded was 33,583.

L&T June 2011 futures were at a premium of 3.65 points at 1718.00 compared with spot closing of 1714.35. The number of contracts traded was 18,714.Among Nifty puts, 5600 SP from the June month expiry was the most active put with addition of 0.96 million or 20.11%.Among Nifty calls, 5500 SP from the June month expiry was the most active put with contraction of 0.67 million or 10.53%.The maximum Call OI outstanding was at 5600 SP (5.78 mn) and that for Puts at 5500 SP (5.74mn).

The respective Support and Resistance levels are: Resistance 5578.73-- Pivot Point 5542.96-- Support 5480.98.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.35 for June -month contract.

The top five scrips with highest PCR on OI were Sintex - 2.00, MRF-2.00, Piramal Healthcare - 1.60, Sun Pharmaceuticals - 1.36, HCL Technologies- 1.17 and Punjab National Bank -1.09.

Among most active underlying, RIL witnessed an addition of 5.48% of Open Interest (OI) in the June month futures contract followed by Tata Motors which added 10.79% of Open Interest (OI) in the near month contract. Meanwhile SUNTV witnessed an addition of 11.58% of OI in the June month futures coupled with State Bank of India which witnessed an addition of 4.21% of OI in the near month contract. Lastly, Reliance Communication witnessed an addition of 3.54% of OI in the June month futures.