Nifty witnesses a cut of over a percent; Closes above 5950 on bargain buying

Nifty pared some of the intraday losses and closed above 5950 mark as some buying activity picked up in the afternoon after a sharp intraday correction. Realty and banks sectors plunged the most after Reserve Bank of India's measures to stem rupee's fall, lowered hopes of interest rate cut. Sentiments got dampened as bond prices fell after the Reserve Bank of India (RBI) announced measures to tighten liquidity in the banking system to prevent a sharp depreciation of the rupee against the dollar. 

Global cues remained mixed, European markets made a flat-to-positive start in the absence of any major trigger and CAC, DAX and FTSE were trading near their neutral line. Asian pacific shares ended mixed as news out of Beijing pointed to a further weakening in the economy offsetting the gains seen on account of inline expectation China’s GDP growth in the April-June quarter.

Nifty started in the red as Reserve Bank of India (RBI) announced a slew of measures in an attempt to curb Rupee’s volatility, including lifting short term interest rates and tightening liquidity. The index continued to remain in a downward journey in late morning trade. However, the session turned out to be less nasty, as index recovered in the second half of trade on availability of select blue chip stocks at lower levels.

Meanwhile, sectoral indices on the NSE made a negative closing. CNX FMCG up by 1.63%, CNX Energy up by 0.61% and CNX Consumption up by 0.41% remained the top gainers in the trade. While, CNX Realty down by 6.23%, CNX PSU Bank down by 5.02%, CNX Finance 4.40%, CNX Service 2.59% and CNX Metal 1.65%  were the loser in the trade.

The India VIX witnessed an addition of 1.06 % at 18.99 as compared to its previous close of 18.79 on Monday. The 50-share CNX Nifty lost 75.55 points or1.25% to settle at 5,955.25.

Nifty July 2013 futures closed at 5969.70 on Tuesday at a premium of 14.45 points over spot closing of 5,955.25, while Nifty August 2013 futures ended at 5994.05 at a premium of 38.80 points over spot closing. Nifty July futures saw contraction of 1.41 million (mn) units taking the total outstanding open interest (OI) to 16.57 mn units. The near month July 2013 derivatives contract will expire on July 25, 2013.

From the most active contracts, Tata Motors July 2013 futures last traded at a discount of 0.60 points at 291.50 compared with spot closing of 292.10. The number of contracts traded was 13,103.

DLF July 2013 futures last traded at a premium of 0.30 points at 164.80 compared with spot closing of 164.50. The number of contracts traded was 22,939.

Yes Bank July 2013 futures last traded at a premium of 1.50 points at 452.90 compared with spot closing of 451.40. The number of contracts traded was 24,005.

Reliance Capital July 2013 futures were at a premium of 0.10 points at 371.20 compared with spot closing of 371.10. The number of contracts traded was 16,135. 

ICICI Bank July 2013 futures were at a premium of 5.35 points at 1007.35 compared with spot closing of 1002.00. The number of contracts traded was 20,273. 

Among Nifty calls, 6,000 SP from the July month expiry was the most active call with an addition of 0.55 million open interest.

Among Nifty puts, 5,800 SP from the July month expiry was the most active put with an addition of 0.91 million open interest.

The maximum OI outstanding for Calls was at 6,000 SP (6.49 mn) and that for Puts was at 5,800 SP (9.19 mn).

The respective Support and Resistance levels of Nifty are: Resistance 5977.22 -- Pivot Point 5944.08 -- Support-- 5922.12.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.64 for July-month contract. The top five scrips with highest PCR on OI were Sesa Goa 2.47, Sun Pharma 1.77, HUL 1.57, ITC 1.50 and Bharti Airtel 1.50.

Among most active underlying, Unitech witnessed an addition of 0.89 million of Open Interest in the July month futures contract followed by Jaiprakash Associates which witnessed an addition of 2.96 million of Open Interest in the near month contract, IFCI witnessed an addition of 0.99 million in the July month futures. Also, Reliance Communication witnessed contraction of 0.15 million in Open Interest in the July month contract and Reliance Power witnessed contraction of 1.97 million of Open Interest in the near month futures contract.