Nifty shows mild pull back after eight session lull

After witnessing sharp correction in eight consecutive sessions, the local index S&P CNX Nifty saw mild pull back on Tuesday as value-buying emerged in large-cap stocks near their crucial support levels. Moreover, positive opening in European markets too supported the sentiments and helped the index to reclaim its crucial 4,800 mark. But the market was extremely volatile during the day due to choppy trade in rupee. The rupee skidded to an all-time low on Tuesday as oil refiners and other companies scrambled to buy dollars, with the currency looking increasingly vulnerable to a swelling current account deficit.

The domestic index made positive start on the back of cover up of short positions ahead of monthly expiry in the derivatives segment later this week and bargain buying in select blue-chip stocks by participants. Moreover, the investors also shrugged off the falling rupee, which hit an all-time low of 52.70 to the dollar at one point of time on Tuesday. Meanwhile, with the rupee falling to a lifetime low, Finance Minister Pranab Mukherjee today said RBI intervention in the forex market will not arrest the slide as FIIs’ pullout and global reasons were behind the depreciation. Afterwards, market got some more strength as investors were busy in building their position in fundamentally strong stocks after the recent slaughter. In the mid noon trade, market continued its strong run and recaptured its crucial 4,850 mark tracking firm opening in European markets. But, it was the last leg of trade where market started its southbound journey as European market pared most of their gains losing its crucial 4,850 level. Meanwhile, the first day of winter session of parliament failed to give any supportive cues to the markets as Rajya Sabha and Lok Sabha adjourned till tomorrow on the back of uproar over various issues, including Telangana, price rise and corruption. Finally, Nifty managed to close with a gain of about 0.70 percent recapturing 4,800 mark.

On the global front, the US markets made a dismal closing on Monday after the lawmakers abandoned their high-profile effort to rein in the country’s ballooning debt. However, Asian stock markets spent most of Tuesday in negative territory, weighed by US and European debt concerns, but the major indexes ended off their lows, with Hong Kong and Seoul closing with gains. Moreover, most of the European counterparts were trading in the positive terrain at this point of time. Back home, most of the sectoral indices on the NSE were settled in the green, CNX IT remained the major gainer, up 1.73% followed by CNX Metal up 1.48% and CNX Auto up by 1.13% while CNX FMCG and CNX Infra declined 1.29% and 0.50% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 4.40% and reached 27.35.

The India VIX witnessed a contraction of 4.40% at 27.35 as compared to its previous close of 28.61 on Monday

The 50-share S&P CNX Nifty gained 34.00 or 0.71% to settle at 4,812.35.

Nifty November 2011 futures closed at 4,803.10 at a discount of 9.25 points over spot closing of 4,812.35, while Nifty December 2011 futures were at 4,827.65 at a premium of 15.30 points over spot closing. The near month November 2011 derivatives contract expires on Thursday, November 24, 2011. Nifty November futures saw addition of 10.78% or 2.45 million (mn) units taking the total outstanding open interest (OI) to 25.19 mn units.

From the most active contract by contract value, SBI’s November 2011 futures were at a discount of 1.85 point at 1689.05 compared with spot closing of 1690.90. The number of contracts traded was 45,789.

ICICI Bank November 2011 futures were at a premium of 0.95 point at 744.95 compared with spot closing of 744.00. The number of contracts traded was 38,998.

Infosys November 2011 futures were at a discount of 2.00 points at 2720.00 compared with spot closing of 2722.00. The number of contracts traded was 20,841.

RIL November 2011 futures were at a discount of 0.40 point at 794.60 compared with spot closing of 795.00. The number of contracts traded was 31,923.

SBI December 2011 futures were at a discount of 12.90 point at 1678.00 compared with spot closing of 1690.90. The number of contracts traded was 29,277.

Among Nifty calls, 4900 SP from the November month expiry was the most active call with addition of 0.24 million or 4.70%.

Among Nifty puts, 4800 SP from the November month expiry was the most active put with an addition of 0.11 million or 2.10%.

The maximum Call OI outstanding for Calls was at 4900 SP (5.30 mn) and that for Puts was at 4800 SP (5.58 mn).

The respective Support and Resistance levels are: Resistance 4850.05-- Pivot Point 4816.3-- Support 4778.60.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.68 for November -month contract.

The top five scrips with highest PCR on OI were Kotak Bank 4.67, Syndicate Bank 3.63, Ruchi Soya 2.47, Patni 2.29 and SREI Infrastructure Finance 2.00.

Among most active underlying, SBI witnessed an addition of 7.56% of Open Interest (OI) in the November month futures contract followed by ICICI Bank witnessed a contraction of 15.47% of Open Interest (OI) in the near month contract. Meanwhile RIL witnessed a contraction of 0.65% in the November month futures. Also, Tata Steel witnessed a contraction of 0.10% in Open Interest (OI) in the November month contract followed by Tata Motors witnessed an addition of 9.05% in Open Interest (OI) in the November month contract.