Southward journey continues on weak global cues; Nifty down 0.75%

Southward journey prolonged for another session as Nifty continued to swing to the tune of dismal global developments and lost another 40 points on Wednesday. The market hammered badly for most part of the day’s trade and breached its crucial 5,000 mark but, a bout of volatility was witnessed in the last leg of trade, which helped the index to regain its psychological 5,000 level. Moreover, Asian markets remained subdued and slashed badly as debt woes of Italy came back into the limelight as concerns grew over the European nation’s ability to pay off its massive debts.

Earlier, the domestic index S&P CNX Nifty made a choppy start on weak global cues. Afterwards, selling intensified and market breached its crucial 5,000 mark on the back of sustained selling triggered by poor second quarter corporate earnings and depreciating rupee to near 51 a dollar. The sentiments also remained subdued as Capital goods stocks tumbled on fears that their earnings will stay muted due to sluggish economic growth amid elevated interest rates and high inflation while, PSU oil marketing companies like BPCL, HPCL and IOC were among the worst-hit snapped the trade with a cut of 2-4.5 percent as the state oil refiners cut petrol prices by 1.85 rupees/litre from Wednesday, while the international crude prices surged to a four-month high overnight. The local index continued to trade in the red in the afternoon amid negative cues from other Asian bourses. Meanwhile, India’s services exports fell by 5.6% year-on-year to $11.22 billion in September, according to the Reserve Bank of India. The country’s total receipts from services exported stood at $11.89 billion in August, RBI data said. Moreover, Export Promotion Council for EOUs and SEZs (EPCES) data showed that exports from special economic zones (SEZs) grew 26.2% year-on-year to Rs 1.76 lakh crore during April-September this fiscal. In the mid noon trade, market pared most of its earlier losses and reclaimed its crucial 5,050 mark following positive European trend. Moreover recovery in Banking and Realty stocks too supported the sentiments. But, in the last half an hour of trade market again nosedived with a steep fall of about 65 points and touched its intraday low breaching its important 5,000 mark. Thereafter, intense volatility was witnessed in last few minutes of trade on reports that the Union Cabinet has approved the Pension Fund Regulatory and Development Authority Bill. Finally, Nifty managed to end the day’s trade over its crucial 5,000 mark with a cut of 0.75 percentage point.

On the global front, the US markets closed marginally higher overnight as optimism were bolstered with the growth in retail sales, while Asian stock markets ended broadly lower on Wednesday and the euro dropped as a rise in European sovereign bond yields on Tuesday triggered fresh concerns over the euro-zone debt crisis. Moreover, most of the European counterparts were trading mixed at this point of time. Back home, on the sectoral front on NSE, CNX Infra remained the major loser, down 2.07% followed by CNX PSE down by 1.14% and CNX Energy down by 1.08% while, CNX PSU Bank and CNX FMCG rose 0.49% and 0.44% respectively. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, down 3.58% and reached 25.04.

The 50-share S&P CNX Nifty lost 38.05 points or 0.75% and settled at 5,030.45.

Nifty November 2011 futures closed at 5,079.00 at a premium of 48.55 points over spot closing of 5,030.45, while Nifty December 2011 futures were at 5,105.00 at a premium of 74.55 points over spot closing. The near month November 2011 derivatives contract expires on Thursday, November 24, 2011. Nifty November futures saw addition of 7.32% or 1.93 million (mn) units taking the total outstanding open interest (OI) to 28.31 mn units.

From the most active contract by contract value, SBI’s November 2011 futures were at a premium of 6.20 point at 1782.90 compared with spot closing of 1776.70. The number of contracts traded was 43,175.

ICICI Bank November 2011 futures were at a premium of 0.85 point at 801.85 compared with spot closing of 801.00. The number of contracts traded was 31,718.

Tata Motors November 2011 futures were at a premium of 0.30 points at 184.00 compared with spot closing of 183.70. The number of contracts traded was 25,610.

Tata Steel November 2011 futures were at a premium of 1.70 point at 413.15 compared with spot closing of 411.45.The number of contracts traded was 26,738.

L&T November 2011 futures were at a premium of 7.25 point at 1253.05 compared with spot closing of 1245.80. The number of contracts traded was 16,714.

Among Nifty calls, 5100 SP from the November month expiry was the most active call with addition of 0.57 million or 12.58%.

Among Nifty puts, 5000 SP from the November month expiry was the most active put with contraction of 0.08 million or 1.09%.

The maximum Call OI outstanding for Calls was at 5100 SP (5.09 mn) and that for Puts was at 5000 SP (7.78 mn).

The respective Support and Resistance levels are: Resistance 5067.26-- Pivot Point 5028.38-- Support 4991.56.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.01 for November -month contract.

The top five scrips with highest PCR on OI were Kotak Bank 4.67, Syndicate Bank 3.22, Dr Reddy’s Lab 2.84, Ruchi Soya 2.10 and Siemens 1.75.

Among most active underlying, SBI witnessed an addition of 1.81% of Open Interest (OI) in the November month futures contract followed by ICICI Bank witnessed an addition of 7.54% of Open Interest (OI) in the near month contract. Meanwhile Tata Steel witnessed an addition of 4.60% in the November month futures. Also, Tata Motors witnessed an addition of 3.3% in Open Interest (OI) in the November month contract followed by RIL witnessed an addition of 2.84% in Open Interest (OI) in the November month contract.