Nifty ends below 6,350 levels on profit booking

Ending the 3-day winning streak, Nifty ended marginally lower on Tuesday amid profit taking at higher levels after they ended at all-time closing highs yesterday as the BJP emerged lead in all the four state elections.

Nifty traded lower in early deals on Tuesday as investors opted to book profits after recent gains. Moreover, weak cues from Asian markets dampened the sentiments with most of the regional counters trading lower. Investors treaded cautiously following a flat close on the Wall Street overnight with the Japanese market trading in the red as investors indulged in some profit taking after recent strong gains. The US markets ended marginally higher in last session, though the trading remained somewhat subdued lacking any major announcement from the economic front and on concerns that central bank may begin tapering its asset purchase plan next week. Back home, sentiments also remained dampened after foreign lender HSBC reported the likelihood of the government breaching its FY14 fiscal deficit target of 4.8% on account of slower revenue and higher expenditure in the first half of the fiscal. However, losses remained capped as some support came in with Paris-based think tank OECD’s report that Indian economy is seeing a tentative positive change in momentum while most of the major economies are witnessing improved growth prospects. Meanwhile, the rupee was trading at 61.06/07 per dollar versus its close of 61.13/14 per dollar on Monday. Profit booking by funds and retail investors in frontline blue chip stocks continued on street in late morning after The Reserve Bank of India (RBI) Governor Raghuram Rajan attributed that current economic woes were due to stimulus provided by the Government to tide over the global crisis of 2008.

After recovering a bit from day’s low level, index continued to gyrate listlessly in red terrain in absence of positive triggers that could take the markets higher amidst mostly negative global set-up. Profit-booking by funds and retail investors right from the start of the trade have kept the mood downbeat at Dalal Street. Although some recovery crept in the last hour of trade as select investors, subscribing to the long-term story of equity markets, indulged in bargain-buying. Thus, by the close of trade, Nifty settled below 6,350 mark.

NSE sectoral indices made a green closing; CNX IT up by 1.90%, CNX FMCG up by 0.92%, CNX Metal up by 0.61% and CNX Pharma up by 0.30% were the top gainers on index. On the other hand, CNX Infra down by 3.20%, CNX PSE down by 3.17%, CNX Bank by 1.84%, CNX PSU Bank by 1.83% and CNX Finance by 1.75% were the top losers on index.

The India VIX decreased by 6.15% at 17.98 as compared to its previous close of 19.16 on Monday. The 50-share CNX Nifty decreased by 31.05 points or 0.49% to settle at 6,332.85.

Nifty December 2013 futures closed at 6369.50 on Tuesday at a premium of 36.65 points over spot closing of 6,332.85, while Nifty January 2014 futures ended at 6423.45 at a premium of 90.60 points over spot closing. Nifty December futures saw an addition of 0.40 million (mn) units taking the total outstanding open interest (OI) to 21.97 mn units. The near month December 2013 derivatives contract will expire on December 26, 2013.

From the most active contracts, Power Grid Corporation of India December 2013 futures last traded at a discount of 2.40 points at 95.00 compared with spot closing of 97.40. The number of contracts traded was 15,726.

DLF December 2013 futures were at a premium of 0.75 points at 160.80 compared with spot closing of 160.05. The number of contracts traded was 16,342. 

NTPC December 2013 futures were at a premium of 1.15 points at 137.15 compared with spot closing of 136.00. The number of contracts traded was 25,101. 

Reliance Industries December 2013 futures were at a premium of 4.10 points at 889.40 compared with spot closing of 885.30. The number of contracts traded was 15,921. 

Yes Bank December 2013 futures were at a premium of 3.20 points at 386.00 compared with spot closing of 382.80. The number of contracts traded was 15,526. 

Among Nifty calls, 6,500 SP from the December month expiry was the most active call with contraction 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 0.18 million in open interest.

The maximum OI outstanding for Calls was at 6,500 SP (5.09 mn) and that for Puts was at 6,000 SP (4.91 mn).

The respective Support and Resistance levels of Nifty are: Resistance 6360.88-- Pivot Point 6334.22- Support -- 6306.18.The Nifty Put Call Ratio (PCR) OI wise, stood at 1.15 for December month contract. The top five scrips with highest PCR on OI were, DR Reddy 1.37, Tata Steel 1.37, Hero Motoco 1.22, Maruti 1.12 and Axis Bank 1.06.

Among most active underlying, Power Grid Corporation of India witnessed an addition of 3.56 million  in Open Interest in the December month futures contract followed by United Spirits  with  an addition of 0.05 million  in Open Interest in the near month contract; SBI witnessed  an addition  of 0.02 million of Open Interest in the December month futures. Reliance Industries witnessed contraction of 0.03 million in Open Interest in the December month contract and TCS witnessed an addition of 0.01 million in Open Interest in the near month futures contract.