Weak rupee caps nifty gains, ends flat

Nifty managed to close flat nonetheless, in the positive terrain for the third straight session, after erasing most of its early gains as the rupee once again weakened past the 64-mark against the dollar. The index was volatile as traders rolled over positions in the futures & options (F&O) segment from the near month August 2013 series to September 2013 series. Sentiment was initially firm after the Finance Ministry indicated that steps to attract capital flows to fund the current account deficit can be expected within a week. The announcement followed Finance Minister P Chidambaram's meetings with overseas investors and top bankers in Mumbai on Saturday.

Extending previous session’s euphoria, nifty made a gap-up opening, recapturing its crucial 5,500, buoyed by supportive global cues. Sentiments got boosted after the Planning Commission deputy chairman Montek Singh Ahluwalia said that the government should use the foreign exchange reserves of a little under $280 billion to deal with a possible shortage and said that the rupee is over depreciated. In late morning trade, index erased more than half of its early gains as the rupee weakened past 64 per dollar, while bond yields inched up, indicating that stability is yet to return to the financial markets. Index regained strength but could not sustain its momentum and fell on profit booking in the early noon session. Although there was an attempt to revive the index in noon but the bears seemed strong taking the benchmark into red. There was spurt in the metal stocks and later by the power stocks that led index surge again but they were dragged by selling at higher levels. The power sector stocks got a fillip with the buzz that the Cabinet Committee on Investments (CCI) is likely to consider fast tracking Rs 49,000 crore to power plants companies like Reliance Power, JSPL and Essar Power, stuck for want of environment and forest clearances at various levels. Finally, amid high volatility the index ended marginally in green.

Sectoral indices on the NSE made a green close. Bank Nifty was down by 1.02%, CNX Finance was down by 0.88%, CNX PSE was down by 0.23%, CNX Service was down by 0.19  and CNX Energy was down by 0.04% remained the top loser in the trade. While, CNX Media was up by 1.57%, CNX MNC was up by 1.49%, CNX Realty was up by 1.48%, CNX Pharma was up by 1.12% and CNX Infra was up by 1.04% remained the top gainers in the trade.

The India VIX witnessed an addition of 2.44% at 26.38 as compared to its previous close of 25.75 on Friday. The 50-share CNX Nifty gain 4.75 points or 0.09% to settle at 5,476.50.

Nifty August 2013 futures closed at 5467.10 on Monday at a discount of 9.40 points over spot closing of 5,476.50, while Nifty September 2013 futures ended at 5492.80 at a premium of 16.30 points over spot closing. Nifty August futures saw contraction of 1.91 million (mn) units taking the total outstanding open interest (OI) to 21.36 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 1.15 points at 137.50 compared with spot closing of 136.35. The number of contracts traded was 24,725.

Tata Steel August 2013 futures last traded at a premium of 1.30 points at 277.75 compared with spot closing of 276.45. The number of contracts traded was 24,724.

Yes Bank August 2013 futures last traded at a premium of 1.05 points at 261.40 compared with spot closing of 260.35. The number of contracts traded was 27,731.

ICICI Bank August 2013 futures were at a discount of 2.70 points at 829.30 compared with spot closing of 832.00. The number of contracts traded was 28,432. 

Reliance Industries August 2013 futures were at a discount of 1.85 points at 821.15 compared with spot closing of 823.00. The number of contracts traded was 18,511.

Among Nifty calls, 5,600 SP from the Aug month expiry was the most active call with contraction of 0.05 million open interest.

Among Nifty puts, 5,300 SP from the Aug month expiry was the most active put with an addition  of 0.13 million open interest.

The maximum OI outstanding for Calls was at 5,600 SP (8.35 mn) and that for Puts was at 5,300 SP (7.86 mn).

The respective Support and Resistance levels of Nifty are: Resistance 5518.65 -- Pivot Point 5486.55 -- Support -5444.4.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.89 for August month contract.

The top five scrips with highest PCR on OI were Bharat Forg 2.39, MRF 1.50, Wipro 1.41, Ranbaxy 1.37,  and Infosys 1.34.

Among most active underlying, SBI witnessed   contraction of 0.67 million of Open Interest in the Aug month futures contract followed by MC Dowell-N which witnessed contraction of 1.74 million of Open Interest in the near month contract; ICICI Bank witnessed  contraction of 0.69 million in the Aug month futures. Also, Reliance Industries witnessed contraction of 0.61 million in Open Interest in the Aug month contract and DLF witnessed  contraction of 4.01 million of Open Interest in the near month futures contract.