After witnessing four consecutive days of fall, Nifty edged lower in early deals on Monday as Investors awaiting WPI inflation numbers to be announced later in the day were trading cautiously citing the Reserve Bank of India's monetary policy and US Federal Reserve’s meeting outcome later this week for the further direction. Global cues too remained choppy with the US markets ending flat in last session, whereas, all the Asian equity benchmarks were trading lower at this point of time with Japanese stock market drifting lower, despite the Bank of Japan’s Tankan survey showing an improvement in Japanese big manufacturers’ business confidence. Lower level of buying was witnessed in front line counters in late morning on report that the government has put on the fast track projects worth Rs 34,647 crore in petroleum and natural gas and power sectors by approving a number of them and giving directions for urgent clearances to the rest.
The downtrend journey on street in noon trade was mainly on account of 14-month high inflation data, which cemented hopes of a 25 basis point rate hike in RBI’s upcoming mid-quarterly monetary policy on December 18 that also dragged the banking pivotal lower by the close of trade. In a knee-jerk reaction to this, Nifty slipped to day’s low only to recover little later as markets had already factored in the rate hike. However, the bout of selling pressure that was witnessed in the last hour of trade dragged the index lower. Meanwhile, on the macro-front, India's main inflation gauge, based on monthly WPI, accelerated to highest level since September 2012 at 7.52% for the month of November as against eight month high figure of 7.00% (Provisional) for the previous month of October. The index traded range bound amid lacklustre trade as sentiments were distraught citing the Fed meet tomorrow and expectations of a certain rate hike in the RBI's monetary policy. In the last leg of trade, the index managed to garner support at the 5150 level.
NSE sectoral indices made a red closing; CNX Energy down by 1.15%, CNX FMCG down by 0.73%, CNX PSU Bank down by 0.64%, CNX Auto down by 0.57% and CNX Realty down by 0.14% were the top losers on index. On the other hand, CNX IT up by 1.70%, CNX MNC up by 1.67%, CNX Media up by 0.57%, CNX Pharma up by 0.51% and CNX Service up by 0.43% were the gainer on index.
The India VIX increased by 2.91% at 18.36 as compared to its previous close of 17.84 on Friday. The 50-share CNX Nifty decreased by 13.70 points or 0.22% to settle at 6,154.70.
Nifty December 2013 futures closed at 6179.70 on Monday at a premium of 25.00 points over spot closing of 6,154.70, while Nifty January 2014 futures ended at 6233.60 at a premium of 78.90 points over spot closing. Nifty December futures saw an addition of 0.45 million (mn) units taking the total outstanding open interest (OI) to 22.46 mn units. The near month December 2013 derivatives contract will expire on December 26, 2013.
From the most active contracts, SSLT December 2013 futures traded at a premium of 1.75 points at 201.50 compared with spot closing of 199.75. The number of contracts traded was 12,310.
Tata Steel December 2013 futures were at a premium of 2.60 points at 411.25 compared with spot closing of 408.65. The number of contracts traded was 15,592.
Aurobindo Pharma December 2013 futures were at a discount of 0.25 points at 349.75 compared with spot closing of 350.00. The number of contracts traded was 24,411.
Reliance Industries December 2013 futures were at a premium of 4.75 points at 849.75 compared with spot closing of 845.00. The number of contracts traded was 11,346.
Yes Bank December 2013 futures were at a premium of 2.75 points at 364.35 compared with spot closing of 361.60. The number of contracts traded was 11,636.
Among Nifty calls, 6,300 SP from the December month expiry was the most active call with an addition of 0.28 million open interest.
Among Nifty puts, 6,000 SP from the December month expiry was the most active put with an addition of 0.29 million in open interest.
The maximum OI outstanding for Calls was at 6,300 SP (6.75 mn) and that for Puts was at 6,000 SP (5.61 mn).
The respective Support and Resistance levels of Nifty are: Resistance 6176.62-- Pivot Point 6161.33- Support -- 6139.42.The Nifty Put Call Ratio (PCR) OI wise, stood at 1.04 for December month contract. The top five scrips with highest PCR on OI were, Auro Pharma 1.82, Mcleodruss 1.76, Infosys 1.49, Axis Bank 1.19 and Tata Steel 1.11.
Among most active underlying, Power Grid Corporation of India witnessed an addition of 5.75 million in Open Interest in the December month futures contract followed by SBI with marginal an addition Open Interest in the December month contract; United Spirits witnessed contraction of 0.12 million of Open Interest in the December month futures. Reliance Industries witnessed an addition of 0.44 million of Open Interest in the December month contract and TCS witnessed contraction of 0.03 million in Open Interest in the near month futures contract.
