Nifty slumps on profit booking in index heavyweights

Nifty saw a sharp selloff in the last hour of trade and closed way below 6150 levels after staying in a tight range throughout the day as blue chips slumped on profit-booking after three consecutive sessions of gains. Investors were also looking ahead for minutes from the U.S. Federal Reserve's October meeting to garner clues about when it might start tapering its monetary stimulus.

Nifty opened in the red in early trades on account subdued cues from Asia and weakness in US share indices in overnight trades. Traders were a bit cautious in the region after the Federal Reserve Chairman Ben S. Bernanke said that low US interest rates will continue long after the central bank ends its program of bond buying. Weakness continued on street in late morning as selling in some heavyweights weighed on the index. Sentiments got dampened by the weakness in rupee, which after two sessions’ of surge, showed some weakness on demand for dollars by state-run oil companies. Also, there was some cautiousness with the Paris-based Organisation for Economic Co-operation and Development (OECD) saying that Indian economy is expected to improve marginally in the current financial year with its GDP at market price projected to expand by 3.4 percent from 3.3 percent in the previous fiscal. Index trimmed partial portion of losses and traded off day’s low level in afternoon deals on emergence of lower level buying but sudden and sharp late hour profit booking dragged the index lower and marked its biggest one-day loss since September 30.

NSE sectoral indices made a green closing. CNX Metal up by 0.10. On the other hand, CNX Media down by 2.28%, CNX Bank down by 1.97%, CNX Finance down by 1.75% and CNX Service down by 0.34% there were losers on index.

The India VIX increased by 7.92 % at 20.83 as compared to its previous close of 19.30 on Tuesday. The 50-share CNX Nifty decreased by 80.45 points or 1.30 % to settle at 6,122.90.

Nifty November 2013 futures closed at 6149.05 on Wednesday at a premium of 26.15 points over spot closing of 6,122.90, while Nifty December 2013 futures ended at 6203.15 at a premium of 80.25 points over spot closing. Nifty November futures saw contraction of 1.14 million (mn) units taking the total outstanding open interest (OI) to 16.64 mn units. The near month November 2013 derivatives contract will expire on November 28, 2013.

From the most active contracts, JP Associates November 2013 futures last traded at a premium of 0.40 points at 48.30 compared with spot closing of 47.90. The number of contracts traded was 9,682.

DLF November 2013 futures were at a premium of 2.10 points at 150.90 compared with spot closing of 148.80. The number of contracts traded was 22,985. 

IDFC November 2013 futures were at a premium of 1.25 points at 106.65 compared with spot closing of 105.40. The number of contracts traded was 10,303. 

Tata Steel November 2013 futures were at a premium of 2.80 points at 385.45 compared with spot closing of 382.65. The number of contracts traded was 18,287. 

Yes Bank November 2013 futures were at a premium of 2.55 points at 366.50 compared with spot closing of 363.95. The number of contracts traded was 21,790.

Among Nifty calls, 6,300 SP from the November month expiry was the most active call with an addition of 0.84 million open interest.

Among Nifty puts, 6,000 SP from the November month expiry was the most active put with contraction  of 0.35 million open interest.

The maximum OI outstanding for Calls was at 6,300 SP (5.99 mn) and that for Puts was at 6,000 SP (5.62 mn).

The respective Support and Resistance levels of Nifty are: Resistance 6182.52-- Pivot Point 6144.73-- Support -- 6085.12.The Nifty Put Call Ratio (PCR) OI wise, stood at 1.14 for November month contract. The top five scrips with highest PCR on OI were, Tata Steel 1.48, Auro Pharma 1.43, Infosys 1.31, Glenmark 1.25 and Arvind 1.09.

Among most active underlying, SBI witnessed contraction of 0.05 million of Open Interest in the November month futures contract followed by United Spirits with contraction of 0.11 million of Open Interest in the near month contract; Reliance Industries witnessed an addition of 0.01 million of Open Interest in the November month futures. ICICI Bank witnessed an addition of 0.28 million in Open Interest in the November month contract and TCS witnessed marginal contraction in Open Interest in the near month futures contract.