Nifty ends lower ahead of CAD data

Nifty began the October series on a weak note and closed below 5,850 level led by decline in bank shares as RBI chief Raghuram Rajan's comments on inflation being still high were seen weighing on market sentiment. meanwhile , Investors also adopted a cautious stance ahead of June-quarter current account deficit (CAD) numbers due Monday, with economists expecting the gap to be higher than the March quarter's $18.1 billion, given the sharp rise in trade deficit and lower remittances during the period.

Nifty edged higher in early trade on  US markets ended higher overnight as a larger-than-expected drop in jobless claims mostly overrode worries about a budget standoff on Capitol Hill. Moreover, Asian markets too were trading mostly higher at this point of time with stock markets in Indonesia, South Korea, Taiwan and Singapore trading notably higher. However, the Japanese Nikkei remained lower as the yen strengthened against the dollar. Volatility continued on street as  index reversed initial gains and hit fresh intraday low  in late morning  trade as sentiments got dampened after global credit rating agency Moody’s has said that uncomfortably high inflation coupled with supply constraints is impacting India’s growth that has slowed to 4.4 percent in the April-June quarter this year. Sentiments also remained down-beat after the RBI’s governor Raghuram Rajan has questioned central banks across the globe, whether current ultra-low interest rates are the right way to return to growth after the financial crisis, sending jitters back home. However, losses also remained capped after Indian rupee appreciated against dollar in early deals. The rupee was trading at Rs 61.93 compared with previous close of Rs 62.08 per dollar.

Weakness continued on street, index hit fresh intraday low in afternoon trade on hawkish comments from the Reserve Bank of India governor Raghuram Rajan that inflation continued to remain high. Investors were also  cautious over the country’s rising fiscal deficit as the government recently announced that it will pay only Rs 5,500 crore subsidy to fertilizer industry under a special banking arrangement (SBA).In last leg off trade, index ended on very weak note on intra-day reversal of Rupee, which pared all its morning gains, also weighed on the sentiment. The rupee was trading at Rs 62.34 per dollar at the time of equity markets closing compared with previous close of Rs 62.08 per dollar. Sentiment also got hurt after Barclays lowered India’s FY14 GDP forecast for the current fiscal to 4.7 per cent, saying the growth and fiscal health of the country are likely to remain under pressure, with 2014 election dynamics adding to uncertainties.

NSE sectoral indices made red  closing. CNX FMCG up by 0.22%, CNX IT surged by 0.11% and CNX Pharma up by 0.02%. On the other hand, CNX Bank down by 1.97%, CNX Finance down by 1.70%,CNX Infra down by 1.63%, CNX PSU Bank down by 1.59%, and CNX Metal down by 1.58% were the losers on sectoral indices.

The India VIX increased by 0.25% at 24.06 as compared to its previous close of 24.00 on Thursday. The 50-share CNX Nifty lost 49.05 points or 0.83% to settle at 5,833.20.

Nifty October 2013 futures closed at 5888.15 on Friday at a premium of 54.95 points over spot closing of 5,833.20, while Nifty November 2013 futures ended at 5927.05 at a premium of 93.85 points over spot closing. Nifty October futures saw contraction of 0.15 million (mn) units taking the total outstanding open interest (OI) to 17.93 mn units. The near month October 2013 derivatives contract will expire on October 31, 2013.

From the most active contracts, DLF October 2013 futures last traded at a premium of 1.85 points at 133.40 compared with spot closing of 131.55. The number of contracts traded was 14,118.

Yes Bank October 2013 futures last traded at a premium of 5.30 points at 307.80 compared with spot closing of 302.50. The number of contracts traded was 21,099.

Tata Steel October 2013 futures were at a premium of 4.45 points at 290.80 compared with spot closing of 286.35. The number of contracts traded was 10,834. 

Reliance Industries October 2013 futures last traded at a premium of 10.90 points at 849.90 compared with spot closing of 839.00. The number of contracts traded was 15,045.

ICICI Bank October 2013 futures were at a premium of 10.30 points at 931.60 compared with spot closing of 921.30. The number of contracts traded was 16,298. 

 Among Nifty calls, 6,000 SP from the Sep month expiry was the most active call with an addition of 0.21 million open interest.

Among Nifty puts, 5,700 SP from the Sep month expiry was the most active put with an addition of 0.26 million open interest.

The maximum OI outstanding for Calls was at 6,000 SP (3.10 mn) and that for Puts was at 5,700 SP (3.80 mn).

The respective Support and Resistance levels of Nifty are: Resistance 5888.5 -- Pivot Point 5853.9 -- Support -- 5798.6.

The Nifty Put Call Ratio (PCR) OI wise, stood at 1.29 for September month contract.

The top five scrips with highest PCR on OI were, Siemens 3.00, Opto Circui 2.88, Jindal Steel 2.52, Finan Tech 1.85, and DR Reddy 1.60.

Among most active underlying, SBI witnessed an addition of 0.26 million in Open Interest in the Sep month futures contract followed by United Spirits with an addition of 0.18 million Open Interest in the near month contract; Reliance Industries witnessed an addition of 0.11 million of Open Interest in the Sep month futures. Yes Bank witnessed an addition of 0.04 million in Open Interest in the Sep month contract and Axis Bank witnessed an addition of 0.31 million in Open Interest in the near month futures contract.