Nifty snaps November F&O series with a drastic cut of 9%

The domestic index S&P CNX Nifty finally finished its sluggish run for the November series below its crucial 4,800 level as global cues remained subdued, moreover the index performed choppy throughout the series and closed with a drastic cut of about 435 points or 9.15 percent compared to last series. The global markets remained weak throughout the month on fears of the European debt crisis. However, today market snapped the day’s trade with a hefty gain of over a percentage point recapturing its crucial 4,750 mark on the back of late hour rally as investors remained busy in buying blue chip stocks on lower level. Moreover, ease in food inflation too added the sentiments.

A bout of volatility was witnessed in the early trade and key benchmark turned choppy after opening on a positive note breaching its crucial 4,700 mark. Market extended its southward journey as funds and retail investors offloaded their positions ahead of F&O expiry. The selling got intensified in mid morning trade and the index touched its intraday low breaching its crucial 4,650 level following weak global cues. The poor results of German bond auction, which met with only 60 percent demand, discouraged investors’ confidence from taking large bets moreover, sluggish US consumer spending data coupled with a report of second straight decline in orders for long-lasting manufactured products also played its share of spoilsport. Afterwards, market witnessed trend reversal in the early noon trade and reclaimed its psychological 4,700 mark as sentiments got some boost after India’s food inflation moderated sharply to single digit. Food inflation fell sharply at 9.01% for the week ended November 12 even as prices of most agricultural items, barring potatoes, onions and wheat, continued to rise, on an annual basis. Food inflation, as measured by the Wholesale Price Index (WPI), was 10.63% in the previous week. Sentiments increased further as fertilizer stocks back in demand on reports that suppliers agreed to cut Di-ammonium Phosphate (DAP) and Nitrogen, Phosphorus, Potassium (NPK) price for Indian fertilizer companies while, retail stocks remained jubilant during the trade as the Union Cabinet is scheduled to meet today to decide on allowing foreign direct investment in the multi-brand retail. But it was the last leg of trade, where the benchmark saw confident up-move following firm European counterparts. Finally, late rally helped Nifty to recapture its important 4,750 level on the back of short covering in most of the front-liners.

On the global front, the US markets extended their gaining streak for the fourth day in a row overnight while, most of the Asian equity indices ended the day’s trade in the positive terrain on Thursday on the back of bargain hunting in blue chip stocks. Moreover, European counterparts were exhibiting a jubilant run where major indices like DAX, CAC and FTSE were trading with a gain of over a percent at this point of time. Back home, most of the sectoral indices on the NSE settled in the positive territory with CNX Media gaining the most, up 3.17% followed by CNX Infra up by 1.93% and CNX Realty up by 1.71% while CNX FMCG down by 0.11% remained the lone loser in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, tumbled 8.89% and reached 27.95.

The India VIX witnessed a contraction of 8.89% at 27.95 as compared to its previous close of 30.68 on Wednesday

The 50-share S&P CNX Nifty gained 50.00 or 1.06% to settle at 4,756.45.

Nifty November 2011 futures closed at 4,757.00 at a premium of 0.55 points over spot closing of 4,756.45, while Nifty December 2011 futures were at 4,777.25 at a premium of 20.80 points over spot closing. Nifty December futures saw addition of 24.98% or 4.71 million (mn) units taking the total outstanding open interest (OI) to 23.58 mn units.

From the most active contract by contract value, SBI’s November 2011 futures were at a discount of 3.45 point at 1653.80 compared with spot closing of 1657.25. The number of contracts traded was 37,348.

RIL November 2011 futures were at a discount of 1.95 point at 773.20 compared with spot closing of 775.15. The number of contracts traded was 34,692.

SBI December 2011 futures were at a premium of 2.75 points at 1660.00 compared with spot closing of 1657.25. The number of contracts traded was 27,566.

Infosys November 2011 futures were at a premium of 6.65 point at 2666.45 compared with spot closing of 2659.80. The number of contracts traded was 16,916.

RIL December 2011 futures were at a premium of 6.55 point at 781.70 compared with spot closing of 775.15. The number of contracts traded was 28,011.

Among Nifty calls, 4700 SP from the November month expiry was the most active call with Open Interest of 1.18 million

Among Nifty puts, 4600 SP from the November month expiry was the most active put with Open Interest of 7.48 million

The respective Support and Resistance levels are: Resistance 4805.33-- Pivot Point 4722.21-- Support 4673.33.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.58 for November -month contract.

The top five scrips with highest PCR on OI were Ruchi Soya 2.75, Patni 2.68, Grasim Industries 2.23, Siemens 1.48 and Hotel Leelaventure 1.30.

Among most active underlying, SBI witnessed a contraction of 12.01% of Open Interest (OI) in the November month futures contract followed by RIL witnessed a contraction of 9.51% of Open Interest (OI) in the near month contract. Meanwhile ICICI Bank witnessed an addition of 0.90% in the November month futures. Also, Tata Motors witnessed an addition of 13.11% in Open Interest (OI) in the November month contract followed by Tata Steel witnessed a contraction of 21.39% in Open Interest (OI) in the November month contract.