Nifty witnesses highest single-day drop in 4 years

Nifty suffered highest single day drop since July 2009 in absolute terms amid heavy selling by foreign institutional investors after RBI imposed fresh restrictions coupled with the weakening rupee which plunged to a new all-time low of Rs 62/$ in intra-day trade. Further, talk of pruning of stimulus measures by the US Fed further dampened sentiments on worries that foreign inflows to emerging markets could take a hit. The rupee has slipped to all time low in early trade amid weak equity markets and despite a slew of measures announced by the central bank on late evening Wednesday aimed at boosting inflows and curbing outflows. Risk appetite further dampened after government imposed new restrictions on foreign exchange outflows and gold imports on Wednesday in a new attempt to prop up the rupee, were also seen hampering an already slowing economy.

Index has collapsed in early trade as several upbeat economic reports spurred thinking that the Federal Reserve will begin to scale back its monthly bond buys in September 2013. In late morning, Nifty plunged as Indian rupee slipped to all time low in early trade despite a slew of measures announced by the central bank on late evening Wednesday aimed at boosting inflows and curbing outflows. In last leg of trade, index turned for the worst as selling intensified on concerns that the Reserve Bank's measures to curb capital outflows would prove insufficient. Though, it was across the board selling but consumer durables, banking, realty, oil & gas and metal were completely butchered, even the defensive sectors healthcare and resilient IT suffered considerable losses.

Sectoral indices on the NSE made a red close. CNX Realty was down by 6.66%, Bank Nifty was down by 5.74%, CNX Metal was down by 5.47 , CNX PSU Bank was down by 5.38, and CNX Finance was down by 5.27% remained the top loser in the trade. While, there was no gainers in the trade.The India VIX witnessed an addition of 26.41% at 23.64 as compared to its previous close of 18.70 on Wednesday. The 50-share CNX Nifty lost 234.45 points or 4.08% to settle at 5,507.85.

Nifty August 2013 futures closed at 5505.00 on Friday at a discount of 2.85 points over spot closing of 5,507.85, while Nifty September 2013 futures ended at 5537.60 at a premium of 29.75 points over spot closing. Nifty August futures saw an addition of 2.71 million (mn) units taking the total outstanding open interest (OI) to 17.61 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 discount of 2.05 points at 144.45 compared with spot closing of 146.50. The number of contracts traded was 18,347.

Tata Motors August 2013 futures last traded at a discount of 1.40 points at 313.60 compared with spot closing of 315.00. The number of contracts traded was 28,965.

Tata Steel August 2013 futures last traded at a premium of 1.95 points at 234.85 compared with spot closing of 232.90. The number of contracts traded was 20,567.

Yes Bank August 2013 futures were at a premium of 3.65 points at 259.25 compared with spot closing of 255.60. The number of contracts traded was 29,508. 

HDFC Bank August 2013 futures were at a discount of 2.05 points at 589.10 compared with spot closing of 591.15. The number of contracts traded was 18,500. 

Among Nifty calls, 5,600 SP from the Aug month expiry was the most active call with an addition of 3.61 million open interest.

Among Nifty puts, 5,400 SP from the Aug month expiry was the most active put with an addition of 2.23 million open interest.

The maximum OI outstanding for Calls was at 5,600 SP (6.40 mn) and that for Puts was at 5,400 SP (7.97mn).

The respective Support and Resistance levels of Nifty are: Resistance 5650.95 -- Pivot Point 5573.5 -- Support - 5430.4.

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 Bharat Forg 2.82, SR Transfin 1.88, Wipro 1.46, Ranbaxy 1.35 and Tata Motors 1.31.

Among most active underlying, SBI witnessed  an addition of 0.34 million of Open Interest in the Aug month futures contract followed by MC Dowell-N which witnessed contraction of 0.04 million of Open Interest in the near month contract; ICICI Bank witnessed contraction  of 0.01 million in the Aug month futures. Also, Reliance witnessed an addition of 1.11 million in Open Interest in the Aug month contract and DLF witnessed an addition of 0.63 million of Open Interest in the near month futures contract.