Nifty treads with caution ahead of RBI policy meet

Nifty after trading in the positive terrain for a while slipped below the neutral line and ended in the red as investors exercised caution ahead of RBI monetary policy review and monthly expiry of equity derivative contracts next week, amid weak trend in global markets.

Pressurized by weak regional cues, nifty opened lower in early deals while investors remained cautious as Finance minister P Chidambaram asked financial sector regulators to put in place all possible measures to avoid any adverse impact on India from the US scaling back its stimulus programme, which he expects 'sooner or later'. Sentiments also remained down-beat ahead of the RBI’s policy announcement next week after the FM’s caution. However, losses remained capped as some support came in from the statement of Prime Minister’s key economic advisory council chairman C Rangarajan, who while rejecting the IMF and World Bank’s pessimistic projections, has exuded confidence that the growth would be around 5.5 percent in the current fiscal. Volatility was observed on street as the index was remained in narrow range in late morning trade. Investor’s sentiments got dampened as the rupee traded marginally weak in early trades due to month-end dollar demand from importers. The rupee was trading at Rs 61.49 compared with previous close of Rs 61.47 per dollar.

In the afternoon trade, index continued to trade lackluster in absence of any positive triggers. Further, negative opening in the European markets added to the already grim environment. Sentiments also got dampened after Rating agency ICRA slashed India’s gross domestic product (GDP) growth estimate by 0.20 per cent to 4.7-4.9 per cent for FY14, citing hardening interest rates which will have a negative impact on the already-tepid economy. In last leg of trade, index broke out in green, however, ferocious selling pressure soon followed and dragged the index to close in the negative zone. 

NSE sectoral indices made a red closing. CNX IT up by 1.51%, CNX Media up by 1.00%, and CNX Service up 0.35%. On the other hand, CNX Realty down by 2.33% CNX Infra down by 1.47%,CNX Metal down by 1.31%, CNX Auto down by 1.09% and CNX FMCG down by 0.92% were the losers on index.

The India VIX decreased by 1.07% at 20.42 as compared to its previous close of 20.64 on Thursday. The 50-share CNX Nifty declined by 19.45 points or 0.32% to settle at 6,144.90.

Nifty October 2013 futures closed at 6151.55 on Friday at a premium of 6.65 points over spot closing of 6144.90, while Nifty November 2013 futures ended at 6203.35 at a premium of 58.45 points over spot closing. Nifty October futures saw contraction of 1.11 million (mn) units taking the total outstanding open interest (OI) to 16.12 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 discount of 0.25 points at 151.35 compared with spot closing of 151.60. The number of contracts traded was 15,049.

ITC October 2013 futures were at a premium of 2.90 points at 340.10 compared with spot closing of 337.20. The number of contracts traded was 14,884. 

Yes Bank October 2013 futures last traded at a premium of 1.05 points at 355.85 compared with spot closing of 354.80. The number of contracts traded was 17,358.

Tata Steel October 2013 futures were at a premium of 1.15 points at 323.00 compared with spot closing of 321.85. The number of contracts traded was 14,730. 

ICICI Bank October 2013 futures were at a premium of 2.00 points at 1024.35 compared with spot closing of 1022.35. The number of contracts traded was 49,833.    Among Nifty calls, 6,300 SP from the October month expiry was the most active call with contraction of 0.04 million open interest.

Among Nifty puts, 6,000 SP from the October month expiry was the most active put with an addition  of 0.48 million open interest.

The maximum OI outstanding for Calls was at 6,300 SP (5.96mn) and that for Puts was at 6,000 SP (6.23 mn).

The respective Support and Resistance levels of Nifty are: Resistance 6230.22-- Pivot Point 6186.58-- Support -- 6120.72.

The Nifty Put Call Ratio (PCR) OI wise, stood at 1.45 for October month contract. The top five scrips with highest PCR on OI were, IOB 1.87, L&T 1.83, Ultra Cem Co 1.65, Siemens 1.63 and ACC 1.60.

Among most active underlying, SBI witnessed contraction of 0.13 million of Open Interest in the October month futures contract followed by Infosys with contraction of 0.23 million of Open Interest in the near month contract; United Spirits witnessed contraction of 0.31 million of Open Interest in the October month futures. Reliance Industries witnessed contraction of 0.54 million in Open Interest in the October month contract and ICICI Bank witnessed contraction of 0.46 million in Open Interest in the near month futures contract.