Nifty closes near the lowest point of the day ahead of RBI policy

Buoyed by firm global cues, Nifty opened in positive terrain in early morning deals above the 6,150 level. Some strength came in from report that foreign institutional investors (FIIs) bought shares worth a net Rs 626.99 crore on October 25, 2013. Sentiments also got some support after Government said it has cleared 13 FDI proposals totaling Rs 1,258 crore and referred Axis Bank's proposal for increasing foreign equity amounting to about Rs 6,266 crore for consideration of the Cabinet. Meanwhile, shares of gold finance companies surged on the buzz that the Reserve Bank of India (RBI) may allow them to lend 75% of the value of jewellery compared with 60% at present.

In late-morning trade, the index was trading in a lackadaisical mood while investors chose to remain on sidelines ahead of the Reserve Bank of India's policy meet on Tuesday amidst the expectation that India’s apex bank would hike key interest rates by 25 basis points, while further slashing MSF rate by the same quantum and US Federal policy meet ending Wednesday.  The Fed's policy-setting arm meets on Oct 29-30 and is expected to hold off any move to scale down its $85 billion monthly bond-buying programme. Index started moving in the negative zone as some selling was observed in afternoon trade as some cautiousness also crept in after report showed that Foreign Direct Investment (FDI) into India declined to 8-month low of $1.4 billion in August, down 38 percent year-on-year. In last leg of trade, the index extended loss and closed near the lowest point of the day at 6100.

NSE sectoral indices made a red closing. CNX Energy Bank up by 0.03% .On the other hand, CNX PSU Bank down by 2.98%, CNX Realty down by 2.38%, CNX FMCG down by 2.57%, CNX Media down by 1.76% and CNX MNC down by 1.14% were the losers on index.

The India VIX increased by 4.26% at 21.29 as compared to its previous close of 20.42 on Thursday. The 50-share CNX Nifty declined by 43.80 points or 0.71% to settle at 6, 101.10. 

Nifty October 2013 futures closed at 6105.30 on Monday at a premium of 4.20 points over spot closing of 6101.10, while Nifty November 2013 futures ended at 6158.85 at a premium of 57.75 points over spot closing. Nifty October futures saw contraction of 1.99 million (mn) units taking the total outstanding open interest (OI) to 14.12 mn units. The near month October 2013 derivatives contract will expire on October 31, 2013.

From the most active contracts, Tata Steel October 2013 futures last traded at a premium of 1.70 points at 313.20 compared with spot closing of 311.50. The number of contracts traded was 14,855.

ITC October 2013 futures were at a premium of 1.65 points at 328.35 compared with spot closing of 326.70. The number of contracts traded was 17,913. 

DLF October 2013 futures were at a premium of 0.20 points at 146.25 compared with spot closing of 146.05. The number of contracts traded was 20,350. 

Yes Bank October 2013 futures last traded at a premium of 1.85 points at 347.25 compared with spot closing of 345.40. The number of contracts traded was 21,270.

ICICI Bank October 2013 futures were at a discount of 1.50 points at 1014.50 compared with spot closing of 1016.00. The number of contracts traded was 23,604. 

Among Nifty calls, 6,300 SP from the October month expiry was the most active call with an addition of 0.46 million open interest.

Among Nifty puts, 6,000 SP from the October month expiry was the most active put with an addition  of 0.36 million open interest.

The maximum OI outstanding for Calls was at 6,300 SP (6.42mn) and that for Puts was at 6,000 SP (6.59 mn).

The respective Support and Resistance levels of Nifty are: Resistance 6148.53-- Pivot Point 6121.32-- Support -- 6073.88.

The Nifty Put Call Ratio (PCR) OI wise, stood at 1.36 for October month contract. The top five scrips with highest PCR on OI were, L&T 1.88, Siemens 1.60, IOB 1.60, Ultra Cem Co 1.54, and Havells 1.52.

Among most active underlying, SBI witnessed contraction of 1.09 million of Open Interest in the October month futures contract followed by Infosys with contraction of 0.19 million of Open Interest in the near month contract; United Spirits witnessed contraction of 0.97 million of Open Interest in the October month futures. Reliance Industries witnessed contraction of 1.48 million in Open Interest in the October month contract and ICICI Bank witnessed contraction of 9.42 million in Open Interest in the near month futures contract.