European jitters drag Nifty below 5,100 mark; CNX Realty down 6%

Intensified selling in last hour of trade dragged Nifty below its crucial 5,100 mark as correction in European peers spooked sentiments. Market witnessed consolidation for most part of the day’s trade but, ended the trade with a cut of over one and a half percent as huge sell off seen in realty, infra and banking stocks as trading sentiment was hit due to a weak trend in global markets following persistent worries over euro zone debt crisis. Moreover, the investors’ emotion also dampened as funds and retail investors succumbed to selling pressure due to high inflation and weak corporate earnings.

The domestic index S&P CNX Nifty opened on a cautious note after global markets weakened on fears of the debt crisis spreading further. However, it managed to recover on the back of buying in auto and software shares in the early trade and recaptured its crucial 5,150 mark. Afterward, the index witnessed see-saw trade in a narrow range till mid noon trade lacking any significant upside triggers. Moreover, fall in PSU oil marketing companies too dampened the sentiments. Stocks of BPCL, HPCL and IOC declined by 0.50-2.50 percent on reports that oil marketing companies are set to reduce petrol prices later this week. In the final hour of trade, market witnessed a steep fall of about 75 points as European markets extended their decline for a second day, as Mario Monti, Italy’s nominated premier, struggled to get political parties to help form his new Cabinet. Meanwhile, Macquarie downgraded its India’s growth forecast for the year to March 2013 by a percentage point to 6.9% due to a lack of policy reforms and the lagged impact of monetary tightening. Moreover, weak result from some companies like, Tata power, Unitech, Tata Motors too weakened the trade. Finally, Nifty snapped the sluggish day of trade near its intraday low with a cut of over one and a half percent breaching its crucial 5,100 mark as hefty selling pressure was evident in the rate sensitive Realty pocket which languished at the bottom of the table after being butchered by close to six percent. Some selling pressure was also marked in the Infra and Banking counters, which lost over two percentage points.

On the global front, the US markets suffered a setback with the start of the new week and the major indices declined by about a percent while, Asian shares fell on Tuesday, as a rise in euro zone bond yields reflected lingering doubts about the ability of politicians in Italy and Greece to push through painful reforms to resolve their debt crises and win market confidence. Moreover, European stocks fell early on Tuesday, adding to the previous session's drop as investors continued to fret about Southern European countries' ability to tackle debt crisis. Back home, all the sectoral indices on the NSE hammered badly and settled in the red, CNX Realty remained the major loser, losing 5.84% followed by CNX Infra down 2.50% and CNX MNC down by 2.25% in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 2.68% and reached 25.97.

The 50-share S&P CNX Nifty lost 79.85 points or 1.55% and settled at 5,068.50.

Nifty November 2011 futures closed at 5,065.95 at a discount of 2.55 points over spot closing of 5,068.50, while Nifty December 2011 futures were at 5,091.50 at a premium of 23.00 points over spot closing. The near month November 2011 derivatives contract expires on Thursday, November 24, 2011. Nifty November futures saw addition of 1.81 million (mn) units taking the total outstanding open interest (OI) to 28.82 mn units.

From the most active contract by contract value, SBI’s November 2011 futures were at a premium of 4.00 point at 1732.00 compared with spot closing of 1728.00. The number of contracts traded was 37,645.

Tata Motors November 2011 futures were at a discount of 0.30 point at 181.30 compared with spot closing of 181.60. The number of contracts traded was 25,532.

ICICI Bank November 2011 futures were at a premium of 2.25 points at 791.00 compared with spot closing of 788.75. The number of contracts traded was 23,053.

Tata Steel November 2011 futures were at a premium of 0.45 point at 400.30 compared with spot closing of 399.85. The number of contracts traded was 20,626.

Axis Bank November 2011 futures were at a premium of 4.85 point at 1009.85 compared with spot closing of 1005.00. The number of contracts traded was 14,255.

Among Nifty calls, 5200 SP from the November month expiry was the most active call with addition of 0.68 million.

Among Nifty puts, 5100 SP from the November month expiry was the most active put with contraction of 0.33 million.

The maximum Call OI outstanding for Calls was at 5200 SP (5.65 mn) and that for Puts was at 5100 SP (5.90 mn).

The respective Support and Resistance levels are: Resistance 5133.88 -- Pivot Point 5093.36 -- Support 5027.98.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.16 for November -month contract.

The top five scrips with highest PCR on OI were Dr Reddy’s Lab 3.59, Siemens 2.72, Ambuja Cements 1.27, HUL 1.15 and Yes Bank 1.10.

Among most active underlying, SBI witnessed contraction of 0.09 million of Open Interest (OI) in the November month futures contract followed by Tata Motors witnessed an addition of 1.61 million of Open Interest (OI) in the near month contract. Meanwhile ICICI Bank witnessed an addition of 0.38 million OI in the November month futures. Also, Tata Steel witnessed an addition of 0.90 million Open Interest (OI) in the November month contract followed by RIL witnessed an addition of 0.30 million Open Interest (OI) in the November month contract.