Nifty closes below 6050 level: IT stocks plunge

Nifty closed lower below 6050 level amid a choppy trade, dragged down by software exporters as investors booked profits as the US lawmakers reached a deal to end the government shutdown and increase the debt ceiling. The weakness in European markets also hurt sentiment.

Nifty slipped into the red after a positive start in early deals as US Senate agreed to reopen the government and raise the debt ceiling to meet a crucial deadline. However, gains on the up-side remained capped while investors remained concerned after the World Bank revised India's economic growth forecast downwards for the current financial year to 4.7 percent from 6.1 percent projected in April, citing two consecutive months of negative business sentiment and higher interest rates. A bout of volatility was witnessed on street as index recouped entire initial losses in morning trade. Sentiments got boosted as RBI governor Raghuram Rajan stated that India’s economy will pick up by year-end mainly due to the start-up of billions of dollars worth of stalled resource projects and a good monsoon season that will bolster agricultural production. Some support also came in after Planning Commission estimated that the current account deficit for 2013-14 will be around 2.5 percent of GDP, much lower than Finance Minister P. Chidambaram’s target of 3.7 percent of GDP. However, investors remained concerned after the World Bank revised India's economic growth forecast downwards for the current financial year to 4.7 percent from 6.1 percent projected in April, citing two consecutive months of negative business sentiment and higher interest rates.

In the early afternoon trade, the Index traded with volatility, as it alternately swung between positive and negative zone near the flat line on selling in banking stocks, after reports suggested of FIIs reduced their exposure in Banking stocks during the September quarter. In the last leg of trade, the index shut shop in red with a cut of over half a percent as selling pressure was witnessed with the negative start of European markets that washed all the early gains and the Index closed below the 6050 level.

NSE sectoral indices made a green closing. CNX Media up by 1.51%, CNX FMCG up by 1.01%, CNX Energy up 0.90%, CNX PSE up 0.20%  and CNX MNC up 0.14%. On the other hand, CNX IT down by 3.54%, CNX Service down by 1.54%, CNX PSU Bank down by 1.20%, CNX Auto down by 1.20% and CNX Realty down by 0.78% were the losers.

The India VIX decreased by 9.38% at 21.06 as compared to its previous close of 23.24 on Tuesday. The 50-share CNX Nifty declined by 43.20 points or 0.71% to settle at 6,045.85.

Nifty October 2013 futures closed at 6071.00 on Thursday at a premium of 25.15 points over spot closing of 6,045.85, while Nifty November 2013 futures ended at 6121.65 at a premium of 75.80 points over spot closing. Nifty October futures saw an addition of 0.07 million (mn) units taking the total outstanding open interest (OI) to 19.23 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 0.55 points at 44.85 compared with spot closing of 44.30. The number of contracts traded was 24,046.

Tata Motors October 2013 futures were at a premium of 1.55 points at 375.55 compared with spot closing of 374.00. The number of contracts traded was 15,554. 

Yes Bank October 2013 futures last traded at a premium of 4.55 points at 337.60 compared with spot closing of 333.05. The number of contracts traded was 22,205.

Reliance Industries October 2013 futures were at a premium of 4.60 points at 884.00 compared with spot closing of 879.40. The number of contracts traded was 21,429. 

ICICI Bank October 2013 futures were at a premium of 6.65 points at 970.45 compared with spot closing of 963.80. The number of contracts traded was 17,000.  Among Nifty calls, 6,200 SP from the October month expiry was the most active call with an addition of 0.60 million open interest.

Among Nifty puts, 5,700 SP from the October month expiry was the most active put with an addition of 0.49 million open interest.

The maximum OI outstanding for Calls was at 6,200 SP (5.05mn) and that for Puts was at 5,700 SP (6.69 mn).

The respective Support and Resistance levels of Nifty are: Resistance 6093.55-- Pivot Point 6063.05-- Support -- 6015.35.

The Nifty Put Call Ratio (PCR) OI wise, stood at 1.39 for October month contract. The top five scrips with highest PCR on OI were, Havells 4.00, Siemens 1.49, Finan Tech 1.45, Ultra Cement 1.43, and Tata Motors 1.40.

Among most active underlying, Infosys witnessed contraction of 0.13 million of Open Interest in the October month futures contract followed by SBI with an addition of 0.16 million of Open Interest in the near month contract; United Spirits witnessed an addition of 6.66 million of Open Interest in the October month futures. Reliance Industries witnessed contraction of 0.01 million in Open Interest in the October month contract and TCS witnessed contraction of 0.22 million in Open Interest in the near month futures contract.