Nifty extends losses for the fifth consecutive day

Nifty fell to its lowest level since May 28 and falling for a fifth successive session on Tuesday, wiping all gains made so far this month, after the rupee slumped below the key psychological level of 60 to the dollar. Weighed down by a weak rupee, the Reserve Bank of India, RBI, on Tuesday chose to keep all key interest rates unchanged and asked the government to take urgent steps to reign in the high current account deficit. Lowering the GDP growth projection for the current fiscal to 5.5 % from 5.7 %, the central bank said the external sector is the 'biggest threat' to economic stability. Moreover, market-men shrugged off positive global leads with most of the Asian equity indices shutting shop in the green as sentiments remained up-beat after the Chinese central bank injected funds into money markets via open market operations for the first time since February, easing fears of another cash crunch ahead of the month end after a severe cash squeeze in June caused market panic. European counters too opened mostly in the green ahead of the US Federal Reserve’s Federal Open Market Committee (FOMC) meeting, which begins later in the day.

The index opened flat and traded with caution, ahead of the start of the Reserve Bank of India’s (RBI) monetary policy review.  Going into the initial period of the monetary review, sporadic bouts of volatility were observed as index recovered hitting fresh intraday highs in morning trade. High volatility was witnessed as index slipped into the red in mid-morning trade soon after the Reserve bank of India (RBI) held its key policy rates viz. the repo rate and cash reserve ratio unchanged in the monetary policy review. In last leg index extended losses to hit fresh intraday low, not recovering from persistent selling in frontline counters, ended the day at it lowest level.

Meanwhile, sectoral indices on the NSE made a negative closing. CNX IT up 0.59% remained the only gainers in the trade. While, CNX PSE down by 3.94%, CNX Energy down 3.70%, CNX Realty down 3.46%, CNX Commodities down by 2.76% and CNX Media down by 2.70% were the top losers.The India VIX witnessed contraction 0.71% at 18.12 as compared to its previous close of 18.25 on Monday. The 50-share CNX Nifty lost 76.60 points or 1.31% to settle at 5,755.05.

Nifty August 2013 futures closed at 5797.55 on Tuesday at a premium of 42.50 points over spot closing of 5,755.05, while Nifty September 2013 futures ended at 5828.75 at a premium of 73.70 points over spot closing. Nifty August futures saw contraction of 0.78 million (mn) units taking the total outstanding open interest (OI) to 17.35 mn units. The near month August 2013 derivatives contract will expire on August 29, 2013.

From the most active contracts, JP Associates August 2013 futures last traded at a premium of 0.60 points at 38.15 compared with spot closing of 37.55. The number of contracts traded was 14,940.

Tata Motors August 2013 futures last traded at a premium of 2.50 points at 286.50 compared with spot closing of 284.00. The number of contracts traded was 14,113.

DLF August 2013 futures were at a premium of 2.40 points at 159.60 compared with spot closing of 157.20. The number of contracts traded was 17,708. 

Yes Bank August 2013 futures last traded at a premium of 3.40 points at 352.10 compared with spot closing of 348.70. The number of contracts traded was 23,258.

ICICI Bank August 2013 futures were at a premium of 6.70 points at 932.95 compared with spot closing of 926.25. The number of contracts traded was 21,300. Among Nifty calls, 6,000 SP from the Aug month expiry was the most active call with an addition of 0.75 million open interest.

Among Nifty puts, 5,700 SP from the Aug month expiry was the most active put with an addition of 1.73 million open interest.

The maximum OI outstanding for Calls was at 6,000 SP (5.48 mn) and that for Puts was at 5,700 SP (5.38mn).

The respective Support and Resistance levels of Nifty are: Resistance 5828.37 -- Pivot Point 5787.98 -- Support-- 5714.67.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.07 for Aug-month contract. The top five scrips with highest PCR on OI were Federal Bank 6.00, Hind Zinc 3.00, Bharat Forg 2.00, Ultra Cemco 1.53,  and Ambuja Cement 1.35.

Among most active underlying, Jaiprakash Associates witnessed an addition of 2.66 million of Open Interest in the Aug month futures contract followed by R Com which witnessed contraction of 0.45 million of Open Interest in the near month contract; Hindalco Industries witnessed contraction of 1.59 million in the Aug month futures. Also, Reliance Power witnessed contraction of 1.81 million in Open Interest in the Aug month contract and BHEL witnessed an addition of 0.08 million of Open Interest in the near month futures contract.