Global woes drag Nifty nearly 100 points down

Nifty extended losses for the second straight session on Monday and closed below the important technical indicator of 200-day exponential moving average (5,751) for the first time since September 6, 2013 as blue chips were hit by worries about the economy after the Reserve Bank of India (RBI) raised interest rates earlier this month, while concerns about a likely U.S. government shutdown also weighed.

Extending their previous session’s southbound journey, Nifty edged lower below 5,800 in early trade as the US markets once again ended lower on Friday on concern of a government shutdown, traders also considered the mixed economic reports and preferred to remain on sidelines. Asian markets too were trading mostly in the red with Japanese stock trading with a cut of over a percent, tracking the weak lead from Wall Street and a stronger yen. In addition, weaker than expected local industrial production data also weighed on investor sentiment. Index extended initial losses and hit its lowest level in nearly three weeks low in morning trade. Sentiments got dampened after the RBI report based on abridged financial results of 2,768 listed non-government non-financial (NGNF) companies, stated that listed non-financial private firms have posted 10.9 percent decline in net profit in the first quarter of the current fiscal. Further, fall in rupee value against dollar and weak Asian cues also added to the pessimistic sentiments. Meanwhile, Investors remained on sidelines ahead of current account deficit (CAD) data to be released by Reserve Bank of India (RBI) later in the day, which may have widened to above 5% of Gross Domestic Product (GDP).

Weakness continued on the bourses in early afternoon trade. Selling pressure intensified in afternoon trade after European stocks opened lower amid political tension in Italy coupled with the US debt ceiling crisis. In the last leg of trade, index extended losses on selling in rate sensitive stocks. Additionally, metal stocks like Tata Steel, NMDC, SAIL, Hindalco, JSW Steel etc. edged lower after a weak Chinese data.

NSE sectoral indices made red closing. CNX MNC up by 0.06% and CNX IT surged by 0.02.On the other hand, CNX Bank down by 2.85%, CNX Finance down by 2.63%, CNX Metal down by 2.57%, CNX Realty down by 2.48%, and CNX Media down by 2.35% were the losers on sectoral indices.

The India VIX increased by 10.76% at 26.65 as compared to its previous close of 24.06 on Friday. The 50-share CNX Nifty lost 97.90 points or 1.68% to settle at 5,735.30.

Nifty October 2013 futures closed at 5791.45 on Monday at a premium of 56.15 points over spot closing of 5,735.30, while Nifty November 2013 futures ended at 5824.70 at a premium of 89.40 points over spot closing. Nifty October futures saw contraction of 1.04 million (mn) units taking the total outstanding open interest (OI) to 16.89 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 2.10 points at 129.65 compared with spot closing of 127.55. The number of contracts traded was 11,757.

Tata Steel October 2013 futures were at a premium of 2.65 points at 275.00 compared with spot closing of 272.35. The number of contracts traded was 15,168. 

Yes Bank October 2013 futures last traded at a premium of 3.65 points at 290.65 compared with spot closing of 287.00. The number of contracts traded was 19,835.

HDFC Bank October 2013 futures were at a premium of 6.55 points at 599.90 compared with spot closing of 593.35. The number of contracts traded was 9,966. 

Reliance Industries October 2013 futures last traded at a premium of 11.15 points at 832.65 compared with spot closing of 821.50. The number of contracts traded was 17,521. Among Nifty calls, 6,000 SP from the Sep month expiry was the most active call with an addition of 0.26 million open interest.

Among Nifty puts, 5,700 SP from the Sep month expiry was the most active put with an addition of 0.07 million open interest.

The maximum OI outstanding for Calls was at 6,000 SP (3.37 mn) and that for Puts was at 5,700 SP (3.88 mn).

The respective Support and Resistance levels of Nifty are: Resistance 5790.83 -- Pivot Point 5754.67 -- Support -- 5699.13.

The Nifty Put Call Ratio (PCR) OI wise, stood at 1.19 for September month contract.

The top five scrips with highest PCR on OI were, Siemens 3.06, Havells 3.06, Jindal Steel 2.74, Opto Circui 2.56, and Ultra Cements 1.59.

Among most active underlying, SBI witnessed an addition of 1.16 million in Open Interest in the Sep month futures contract followed by United Spirits with an addition of 0.03 million Open Interest in the near month contract; Reliance Industries witnessed an addition of 0.10 million of Open Interest in the Sep month futures. ICICI Bank witnessed an addition of 0.25 million in Open Interest in the Sep month contract and DLF witnessed an addition of 0.41 million in Open Interest in the near month futures contract.