Bears take control again after a day of relief; Nifty down 1%

Bears smashed bulls once again after a yesterday’s relief rally as jitters over European debt crisis spooked sentiments after Chancellor Angela Merkel’s comments that ‘Euro bonds are not needed and not appropriate,’ triggered a wave of negative sentiments. She also ruled out an expanded role for the European Central Bank in fighting the debt crisis. After, a dismal start market recovered from its lows and traded on a flat note till mid noon trade, with the Nifty moving into positive zone. But, in the final hour of trade, market witnessed a steep fall and ended near the day’s lows following cues from European counterparts.

Earlier, S&P CNX Nifty made a soft opening as German Chancellor’s comments weighed sentiments. Meanwhile, data showing heavy selling by foreign funds recently too hit investors’ sentiment adversely. FIIs sold shares worth a massive Rs 1636.08 crore in a single trading session on November 24, 2011. But, the market, turned positive in the mid morning trade as trader’s opted value buying in the beaten down high beta sectors. The sentiments also got support as shares of Pantaloon Retail, Shoppers Stop, Vishal Retail, Koutons, Trent and CESC rallied 6-20%, as the government on Thursday allowed 51% foreign direct investment (FDI) in multi-brand retail as well as 100% FDI in single brand retail. While the reports that cabinet allowed foreign retailers to own a 51% stake in the multi-brand retail sector, and also approved a 100% FDI in single-brand retail, encouraged not only domestic retailers but also global groups such as Walmart, Carrefour and Tesco. The cabinet also cleared the new companies’ bill that is aimed at overhauling corporate governance norms and that too impacted positively on the market. Afterwards, market traded in the tight band till mid noon trade near its neutral line as investors refrained from accumulating stocks ahead of global uncertainty. But, it was the final hour of trade where market saw steep fall of about 50 points following depressing development in European counterparts. Finally, Nifty snapped the day’s trade near its intraday low with a cut of about a percentage point.

On the global front, US markets remained closed for the Thanksgiving Day holiday. Asian stock markets ended lower on Friday after Germany continued to oppose a bigger role for the European Central Bank in managing the continent's debt crisis and Portugal’s credit rating was lowered to junk. Moreover, European counterparts were trading in the negative terrain at this point of time. Back home, most of the sectoral indices on the NSE were settled in the red, CNX IT remained the major loser, down 2.05% followed by CNX Metal down 1.96% and CNX Energy down by 1.47% while CNX PSU Bank and CNX Infra surged 1.26% and 1.03% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 4.18% and reached 29.12.

The India VIX witnessed an addition of 4.18% at 29.12 as compared to its previous close of 27.95 on Thursday

The 50-share S&P CNX Nifty lost 46.40 or 0.98% to settle at 4,710.05.

Nifty December 2011 futures closed at 4,707.30 at a discount of 2.75 points over spot closing of 4,710.05, while Nifty January 2011 futures were at 4,728.80 at a premium of 18.75 points over spot closing. The near month December 2011 derivatives contract expires on Thursday, December 29, 2011. Nifty December futures saw addition of 2.03 million (mn) units taking the total outstanding open interest (OI) to 23.37 mn units.

From the most active contract by contract value, SBI's December 2011 futures were at a discount of 18.65 point at 1670.35 compared with spot closing of 1689.00. The number of contracts traded was 35,279.

L&T December 2011 futures were at a discount of 9.20 point at 1255.50 compared with spot closing of 1264.70. The number of contracts traded was 18,353.

ICICI Bank December 2011 futures were at a premium of 4.00 points at 721.00 compared with spot closing of 717.00. The number of contracts traded was 24,689.

Tata Motors December 2011 futures were flat at 170.40 compared with spot closing of 170.40. The number of contracts traded was 20,029.

Pantaloon Retail December 2011 futures were at a premium of 1.55 point at 236.00 compared with spot closing of 234.45. The number of contracts traded was 16,584.

Among Nifty calls, 4900 SP from the December month expiry was the most active call with addition of 0.45 million or 14.27%.

Among Nifty puts, 4600 SP from the December month expiry was the most active put with an addition of 0.74 million or 19.78%.

The maximum Call OI outstanding for Calls was at 4900 SP (3.60 mn) and that for Puts was at 4600 SP (4.46 mn).

The respective Support and Resistance levels are: Resistance 4753.86-- Pivot Point 4723.48-- Support 4679.66.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.39 for December -month contract.

The top five scrips with highest PCR on OI were Patni 17.67, Ambuja Cement 2.15, Century Textile 2.00, Cipla 1.79 and Dr Reddy's Laboratories 1.46.

Among most active underlying, SBI witnessed an addition of 9.59% of Open Interest (OI) in the December month futures contract followed by L&T witnessed an addition of 4.88% of Open Interest (OI) in the near month contract. Meanwhile Tata Motors witnessed an addition of 6.60% in the December month futures. Also, ICICI Bank witnessed an addition of 6.19% in Open Interest (OI) in the December month contract followed by RIL witnessed an addition of 2.72% in Open Interest (OI) in the December month contract.