Nifty ends lower ahead of derivatives settlement

Nifty edged higher in early trades on Tuesday tracking positive cues from global markets. The US markets continued their up-move in the new week taking the Dow and the S&P 500 to new record highs, backed by continued optimism about the outlook for the US economy following IMF’s positive comments. Moreover, all the Asian equity indices, barring Jakarta Composite, were trading with traction in early deals with Japanese markets gaining three fourth of a percent as a weaker yen triggering some hectic buying at several counters. A bout of volatility was witnessed on street as index slipped into a negative territory for a short while, however turned positive once again in late morning trade as investors remained wary of the near-term December 2013 derivatives expiry on Thursday. However, broader markets continued to perform well boosted by market regulator SEBI's move to relax norms on trading of thinly-traded stocks. This will see many illiquid stocks shift to normal trading session from the periodic call auction window. Markets took support at lower levels and turned positive as Commerce and Industry Minister Anand Sharma highlighted that India will achieve the modest export target of $325 billion for the current fiscal but to enhance it substantially, the country needs to boost its manufacturing capability. The rate sensitive counters like, Banking and Realty remained under pressure as the RBI Governor Raghuram Rajan has said that fighting rising prices will continue to be its priority and a call on raising interest rates will be taken after factoring in more data. However, he said that the Reserve Bank will wait for next set of data on inflation and industrial growth before taking a call on interest rates.

In the afternoon deals, index continued lackluster trade, cautiously awaiting the opening of European markets for further direction. Volatility played out largely and took the index lower near day’s lowest point by the end of trade. Nifty, after day of consolidation, ended below the crucial 6,300 levels, with loss of around quarter of a percent.

NSE sectoral indices made a red closing; CNX PSU Bank up by 0.32%, CNX Media up by 0.07% and CNX IT up by 0.06% were the gainers on index. On the other hand, CNX Metal down by 0.93%, CNX Finance down by 0.50%, CNX Bank down by 0.42%, CNX Service down by 0.35% and CNX Energy down by 0.32%, were the losers on index.

The India VIX decreased by 3.07% at 15.76 as compared to its previous close of 16.26 on Monday. The 50-share CNX Nifty decreased by 17.40 points or 0.28% to settle at 6,267.10.

Nifty December 2013 futures closed at 6281.70 on Tuesday at a premium of 13.30 points over spot closing of 6,268.40, while Nifty January 2014 futures ended at 6338.50 at a premium of 70.10 points over spot closing. Nifty December futures saw contraction of 1.79 million (mn) units taking the total outstanding open interest (OI) to 11.57 mn units. The near month December 2013 derivatives contract will expire on December 26, 2013.

From the most active contracts, DLF December 2013 futures traded at a premium of 0.35 points at 171.15 compared with spot closing of 170.80. The number of contracts traded was 19,679.

Reliance Industries December 2013 futures were at a premium of 2.15 points at 899.25 compared with spot closing of 897.10. The number of contracts traded was 19,085. 

ICICI Bank December 2013 futures were at a premium of 2.70 points at 1100.65 compared with spot closing of 1097.95. The number of contracts traded was 21,794. 

Ranbaxy Laboratories December 2013 futures were at a premium of 0.45 points at 468.25 compared with spot closing of 467.80. The number of contracts traded was 15,924. 

SBI December 2013 futures were at a premium of 5.70 points at 1761.85 compared with spot closing of 1756.15. The number of contracts traded was 30,007. 

 Among Nifty calls, 6,300 SP from the December month expiry was the most active call with an addition of 0.98 million open interest.

Among Nifty puts, 6,200 SP from the December month expiry was the most active put with an addition of 0.19 million open interest.

The maximum OI outstanding for Calls was at 6,300 SP (6.99 mn) and that for Puts was at 6,200 SP (6.91 mn).

The respective Support and Resistance levels of Nifty are: Resistance 6292.6-- Pivot Point 6277.3- Support -- 6253.1.The Nifty Put Call Ratio (PCR) OI wise, stood at 1.26 for December month contract. The top five scrips with highest PCR on OI were Mcleodruss 2.15, Auro Pharma 2.00, Dr reddy 1.68, Infosys 1.55, and Wipro 1.46.

Among most active underlying, SBI witnessed contraction of 0 78 million in Open Interest in the December month futures contract followed by Reliance Industries witnessed contraction of 1.72 million of Open Interest in the December month contract; United Spirits witnessed contraction of 1.18 million of Open Interest in the December month futures. ICICI Bank witnessed contraction of 2.29 million of Open Interest in the December month contract and TCS witnessed contraction of 0.67 million in Open Interest in the near month futures contract.