Nifty ends marginally above 6,300 ahead of Nov CPI data

Nifty ended lower on Wednesday amid a volatile trading session as investors were uncertain about the trend as the market slid down after hitting record highs on Monday. Weakness in global peers on Fed tapering fears, likely contraction in October industrial output data and warning of downgrade by S&P caused selling pressure today. However, the market shrugged off the narrowing in November trade deficit data.

Prolonging southward journey for second continuous day, Nifty opened lower in early deals with its 6,300 levels amid weak global cues. The US markets ended modestly lower overnight after a lackluster trade in last session, however, the selling remained subdued that capped the downside. All the Asian equity markets were trading in the red terrain tracking weak cues from Wall Street. Weakness continued on street in late morning as the rupee snapped its five-day rising streak against the American currency and fell by 29 paise at 61.33 per dollar in early trades today at the Interbank Foreign Exchange market on fresh dollar demand by importers.

Relentless selling pressure on street in noon trade dragged the index to its lowest point despite the narrower November trade deficit data amidst mostly negative regional counterparts. On the macro-front, in positive news, India’s import hit the lowest level in four years, by 16.37% annually to $33.8 billion in November, leaving narrower trade deficit of $9.22 billion as against $17.2 billion deficit in November 2012. Prevailing caution ahead of other crucial macro-economic data, viz, October IIP, November CPI data, to be released tomorrow, mainly dissuaded investors from taking any positions into risk equities. Street is widely expecting India’s inflation to remain close to 9-month highs in November putting further pressure on the central bank to follow up on its back-to-back interest rate hikes despite slowing economic growth. Nevertheless, the trade also took a turn for the worse after S&P underscored that India’s sovereign rating may come under pressure if general elections due by May next year end up with a hung parliament or with a government unable to push through reforms. Late hour recovery helped trim partial portion of losses of Nifty, with loss of around two tens of a percent, aided largely by November trade data, which came in-line with the expectations and also bargain buying that got triggered at lower levels.

NSE sectoral indices made a red closing; CNX Media up by 1.14%, CNX FMCG up by 0.63%, CNX MNC up by 0.18% were the top gainers on index. On the other hand, CNX PSU Bank down by 2.16%, CNX Infra down by 1.42%, CNX Auto by 1.00%, CNX PSE by 0.90% and CNX Realty by 0.65% were the top losers on index.

The India VIX decreased by 2.44% at 17.54 as compared to its previous close of 17.98 on Tuesday. The 50-share CNX Nifty decreased by 24.95 points or 0.39% to settle at 6,307.90.

Nifty December 2013 futures closed at 6343.45 on Wednesday at a premium of 35.55 points over spot closing of 6,307.90, while Nifty January 2014 futures ended at 6395.75 at a premium of 87.85 points over spot closing. Nifty December futures saw an addition of 0.06 million (mn) units taking the total outstanding open interest (OI) to 22.03 mn units. The near month December 2013 derivatives contract will expire on December 26, 2013.

From the most active contracts, DLF December 2013 futures last traded at a premium of 0.15 points at 157.40 compared with spot closing of 157.25. The number of contracts traded was 11,256.

Hindalco Industries December 2013 futures were at a premium of 0.65 points at 124.20 compared with spot closing of 123.55. The number of contracts traded was 11,200. 

Tata Motors December 2013 futures were at a premium of 3.10 points at 380.60 compared with spot closing of 377.50. The number of contracts traded was 13,522. 

Tata Steel December 2013 futures were at a discount of 0.65 points at 420.35 compared with spot closing of 421.00. The number of contracts traded was 15,543. 

Yes Bank December 2013 futures were at a premium of 0.70 points at 389.15 compared with spot closing of 388.45. The number of contracts traded was 18,421. 

Among Nifty calls, 6,500 SP from the December month expiry was the most active call with an addition of 0.25 million open interest.

Among Nifty puts, 6,000 SP from the December month expiry was the most active put with  contraction  of 0.03 million in open interest.

The maximum OI outstanding for Calls was at 6,500 SP (5.34 mn) and that for Puts was at 6,000 SP (4.88 mn).

The respective Support and Resistance levels of Nifty are: Resistance 6329.58-- Pivot Point 6304.92- Support -- 6283.23.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 1.40, Tata Steel 1.35, Maruti 1.28, Axis Bank 1.11 and Mcleodruss 1.03.

Among most active underlying, Power Grid Corporation of India witnessed an addition of 1.03 million  in Open Interest in the December month futures contract followed by United Spirits  with  an addition of 0.08 million  in Open Interest in the near month contract; SBI witnessed  an addition  of 0.11 million of Open Interest in the December month futures. Reliance Industries witnessed marginal contraction in Open Interest in the December month contract and TCS witnessed an addition of 0.14 million in Open Interest in the near month futures contract.