Nifty snaps-five day gains to end below 6,100 mark

Nifty ended on a negative note below 6,100 level on back of selling pressure witnessed in financial shares after higher-than-expected inflation data dented hopes for a rate cut. Extending their northward journey to sixth straight day, index edged higher and hit 21-week high in morning deals supported by firm global cues coupled with better-than-expected Reliance Industries’ Q2 numbers. RIL reported a 14% growth in revenues to Rs 106,523 crore in the July-September quarter and posted a marginal 1.5% increase in net profit to Rs 5,490 crore. Most importantly, it became the first private sector firm to report revenues exceeding Rs 1 lakh crore in a quarter. Some support also came in from the Planning Commission Deputy Chairman, Montek Singh Ahluwalia’s statement that inflation will soften in coming months, as the steps taken by government to destock the excess food stocks would result in cooling-off of prices in few weeks ahead. Some support also came in from appreciation in rupee. The rupee appreciated in early trade tracking the Non Deliverable Forwards (NDF) market. 

A bout of volatility was witnessed on the street and the index gave away a lion's part of strong initial gains, slipped into the red to hit fresh intraday low in late morning trade mainly on selling witnessed in rate sensitive stocks such as banking, realty and auto. Investors' sentiments were dampened after the WPI inflation, a most closely gauge of price rise in the economy, accelerated to 7-month high of 6.46% in the month of September as against 6.10% in August. The recently released WPI inflation number faded the rate cut hopes as it stayed above RBI’s comfort zone of four to five percent. Sentiments were also dented as Confederation of Indian Industry (CII) survey indicated that Indian economy is likely to grow by less than 5 percent in the current fiscal. The looming US debt ceiling concerns also kept the investors jittery.

In the afternoon trade, index trimmed intraday losses and hovered in positive terrain led by the recovery in Metal counter. Nevertheless, bottom fishing at lower level tailing a positive start of European markets added to the positive forces for index. In the last leg, recovery proved short-lived and index once again entered into the red terrain and closed below 6,100 level.

NSE sectoral indices made a green closing. CNX Metal up by 0.73%, CNX IT up by 0.65% and CNX MNC 0.02%. On the other hand, CNX PSU Bank down by 3.11%, CNX Bank down by 2.59%, CNX Finance down by 1.72%, CNX Realty down by 1.58%, CNX Service down by 0.78% and CNX Auto down by 0.59% were the losers.

The India VIX increased by 1.70% at 23.24 as compared to its previous close of 22.85 on Monday. The 50-share CNX Nifty inclined by 23.65 points or 0.39% to settle at 6,089.05.

Nifty October 2013 futures closed at 6110.65 on Tuesday at a premium of 21.60 points over spot closing of 6,089.05, while Nifty November 2013 futures ended at 6157.95 at a premium of 68.90 points over spot closing. Nifty October futures saw an addition of 0.90 million (mn) units taking the total outstanding open interest (OI) to 19.16 mn units. The near month October 2013 derivatives contract will expire on October 31, 2013.

From the most active contracts, JP Associates October 2013 futures last traded at a premium of 0.20 points at 41.85 compared with spot closing of 41.65. The number of contracts traded was 18,091.

Hindalco Industries October 2013 futures were at a premium of 0.40 points at 112.90 compared with spot closing of 112.50. The number of contracts traded was 16,438. 

Tata Steel October 2013 futures were at a premium of 1.65 points at 312.45 compared with spot closing of 310.80. The number of contracts traded was 21,853. 

Yes Bank October 2013 futures last traded at a discount of 0.45 points at 332.55 compared with spot closing of 333.00. The number of contracts traded was 24,794.

HDFC Bank October 2013 futures were at a premium of 6.30 points at 654.35 compared with spot closing of 648.05. The number of contracts traded was 19,605. 

The maximum OI outstanding for Calls was at 6,300 SP (4.91mn) and that for Puts was at 5,700 SP (6.20 mn).

The respective Support and Resistance levels of Nifty are: Resistance 6144.72-- Pivot Point 6100.63-- Support -- 6044.97.

The Nifty Put Call Ratio (PCR) OI wise, stood at 1.33 for October month contract. The top five scrips with highest PCR on OI were, Havells 3.00, Tata Motors 1.74, Infosys 1.47,Finan Tech 1.46and  Ultra Cemco 1.40.

Among most active underlying, Infosys  witnessed  marginal an addition  in Open Interest in the October month futures contract followed by SBI with marginal an addition Open Interest in the near month contract; United Spirits witnessed contraction of 0.07 million of Open Interest in the October month futures. Reliance Industries witnessed contraction of 0.19 million in Open Interest in the October month contract and ICICI Bank witnessed contraction of 0.24 million in Open Interest in the near month futures contract.