Nifty snaps 3-day winning spree, ends lackluster session in red

Nifty, discontinuing its three-day up move closed in the red, however managed to hold 6,200 level amid a lackluster session of trade as investors were uncertain about the market trend due to weak global cues and renewed fears of US Fed tapering its economic stimulus. A bout of volatility was witnessed on street in early deals as Nifty opened lower on Tuesday tracking negative global cues. Most of the Asian equity benchmarks were trading lower as investors remained cautious, tracking negative cues from Wall Street overnight, as better than economic reports raised speculation the Federal Reserve will soon tighten its monetary policy. Meanwhile, Shanghai Composite edged lower on expectations that China will restart initial public offerings in the new year, raising fears of a share glut. Back home, sentiments also remained dampened after the output of eight core sector industries contracted by 0.6 percent in October due to poor showing by coal, oil and gas sectors. Meanwhile, stocks related to Auto space witnessed selling as sales dipped again in November. Volatility continued on street in late morning as index pared losses on emergence of lower level buying on good economic data of trade deficit. India’s current-account deficit shrank to a four-year low to $5.2 billion or 1.2% of gross domestic product (GDP), in the September quarter, sharply lower from the $21 billion deficit recorded a year ago period. Meanwhile, Finance minister P Chidambaram has said that the economy is expected to grow by 5% in 2013-14 and the fiscal and current account deficits would be contained.

In the afternoon trade, banking stocks witnessed selling pressure as RBI proposed increased capital requirements and intense regulation for too big to fail kind of banks. Further, RBI also issued updated guidelines for stress-testing of banks which will be effective from April. Meanwhile, Telecom stocks too were hogging some limelight ahead of EGOM spectrum meet later in the day. In the last leg of trade, the index, although continuing its lackluster trade somehow managed to close just above the pschyological level of 6200.

NSE sectoral indices made a green closing; CNX Realty up by 1.17%, CNX Media up by 1.08%, CNX Metal up by 0.26%, CNX Energy up by 0.26% and CNX IT up by 0.16% were the gainers on index. On the other hand, CNX FMCG down by 0.74%, CNX PSU BANK down by 0.70%, CNX Bank down by 0.65%, CNX Infra down by 0.63% and CNX Auto down by 0.45% were the only losers on index.

The India VIX increased by 5.82% at 24.72 as compared to its previous close of 23.36 on Monday. The 50-share CNX Nifty decreased by 16.00 points or 0.26% to settle at 6,201.85.

Nifty December 2013 futures closed at 6248.40 on Tuesday at a premium of 46.55 points over spot closing of 6,201.85, while Nifty January 2014 futures ended at 6303.60 at a premium of 101.75 points over spot closing. Nifty December futures saw an addition of 0.30 million (mn) units taking the total outstanding open interest (OI) to 18.77 mn units. The near month December 2013 derivatives contract will expire on December 26, 2013.

From the most active contracts, Unitech December 2013 futures last traded at a premium of 0.05 points at 17.50 compared with spot closing of 17.45. The number of contracts traded was 13,638.

DLF December 2013 futures were at a premium of 0.55 points at 157.25 compared with spot closing of 156.70. The number of contracts traded was 14,469. 

Hindalco Industries December 2013 futures were at a premium of 0.85 points at 124.90 compared with spot closing of 124.05. The number of contracts traded was 12,687. 

Tata Motors December 2013 futures were at a premium of 5.00 points at 402.80 compared with spot closing of 397.80. The number of contracts traded was 17,153. 

Reliance Industries December 2013 futures were at a premium of 6.55 points at 868.05 compared with spot closing of 861.50. The number of contracts traded was 14,771. 

Among Nifty calls, 6,500 SP from the December month expiry was the most active call with an addition of 0.20 million open interest.

Among Nifty puts, 6,000 SP from the December month expiry was the most active put with an addition of 0.19 million in open interest.

The maximum OI outstanding for Calls was at 6,500 SP (4.88 mn) and that for Puts was at 6,000 SP (5.53 mn).

The respective Support and Resistance levels of Nifty are: Resistance 6221.03-- Pivot Point 6206.22-- Support -- 6187.03.The Nifty Put Call Ratio (PCR) OI wise, stood at 0.99 for December month contract. The top five scrips with highest PCR on OI were, DR Reddy 1.93, HDFC 1.41, Mcleodruss 1.08, Power Grid 1.07and IOC 1.03.

Among most active underlying, United Spirits witnessed an addition of 0.09 million in Open Interest in the December month futures contract followed by SBI with contraction of 0.04 million of Open Interest in the near month contract; Reliance Industries witnessed contraction of 0.20 million of Open Interest in the December month futures. ICICI Bank witnessed an addition of 0.23 million in Open Interest in the December month contract and TCS witnessed an addition of 0.06 million in Open Interest in the near month futures contract.