Nifty ends lower on fear of Fed's stimulus-exit

CNX Nifty ended lower on Wednesday amid weak Asian cues and selling witnessed in IT, auto and service stocks. Investors also remained concerned that the US Federal Reserve may soon reduce its stimulus after world’s biggest economy showed signs of growth. On global front, Asian markets closed in red, while, European markets made a negative start on Wednesday.

Back home, Nifty made a flat but positive start, though it soon entered into the negative territory pressurized by weak global cues as the US markets ended lower in the previous session on renewed concern about the outlook for the Federal Reserve’s stimulus program after the trade deficit narrowed by much more than expected in the month of June. In the first half, market traded in negative territory as investors’ sentiments turned down by weakness in domestic currency. Rupee value depreciated over 13 percent since April-end and has touched a new record low of 61.80 to a dollar on August 6. However, market losses remained capped amid value buying in realty, banking and PSU stocks. Market continued its weak trade in the second half too on account of selling in front line counters and taking cues from European counterparts. Finally, Nifty ended the session with a loss of 23 points.    

Sectoral indices on the NSE made a mixed closing. CNX FMCG was down by 1.55%, CNX Auto was down 1.41%, CNX IT down 1.39%, CNX Media down 0.85% and CNX Pharma down 0.73% remained the top losers in the trade. While, CNX Realty up by 5.58%, CNX PSU Bank up by 3.76%, CNX Energy up by 2.88%, CNX PSE up by 2.15% and CNX Infra up by 0.94% remained the gainers in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, down 3.04% and reached 22.04.

The India VIX witnessed contraction of 3.04% at 22.04 as compared to its previous close of 22.73 on Tuesday.The 50-share CNX Nifty lost 23.15 points or 0.42% to settle at 5,519.10.

Nifty August 2013 futures closed at 5554.15 on Wednesday at a premium of 35.05 points over spot closing of 5,519.10, while Nifty September 2013 futures ended at 5583.80 at a premium of 64.70 points over spot closing. Nifty August futures saw contraction of 1.13 million (mn) units taking the total outstanding open interest (OI) to 15.56 mn units. The near month August 2013 derivatives contract will expire on August 29, 2013.

From the most active contracts, DLF August 2013 futures last traded at a premium of 1.20 points at 131.70 compared with spot closing of 130.50. The number of contracts traded was 19,421.

Tata Motors August 2013 futures last traded at a discount of 5.35 points at 279.65 compared with spot closing of 285.00. The number of contracts traded was 42,581.

Yes Bank August 2013 futures were at a premium of 2.90 points at 295.40 compared with spot closing of 292.50. The number of contracts traded was 35,887. 

ICICI Bank August 2013 futures last traded at a premium of 10.35 points at 875.70 compared with spot closing of 865.35. The number of contracts traded was 18,908.

HDFC August 2013 futures were at a premium of 9.85 points at 735.65 compared with spot closing of 725.80. The number of contracts traded was 16,187. 

Among Nifty calls, 6,000 SP from the Aug month expiry was the most active call with an addition of 0.32 million open interest. Among Nifty puts, 5,400 SP from the Aug month expiry was the most active put with an addition of 1.53 million open interest.

The maximum OI outstanding for Calls was at 6,000 SP (6.70 mn) and that for Puts was at 5,400 SP (7.17 mn). The respective Support and Resistance levels of Nifty are: Resistance 5558.08 -- Pivot Point 5522.47 -- Support - 5483.48.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.97 for August month contract.

The top five scrips with highest PCR on OI were Federal Bank 2.00, Power Grid 1.48, Mcleod Russell 1.33, Infosys 1.29 and Bharat Forge 1.20.

Among most active underlying, JP Associates witnessed an addition of 0.54 million of Open Interest in the Aug month futures contract followed by Unitech which witnessed an addition  of 1.76 million of Open Interest in the near month contract; Reliance Communications witnessed an addition of 0.10 million in the Aug month futures. Also, BHEL witnessed contraction of 0.39 million in Open Interest in the Aug month contract and DLF witnessed an addition of 0.78 million of Open Interest in the near month futures contract.