Nifty ends below 6,200 levels on drop in services output

Pressurized by weak global cues, Nifty edged lower in early deals on Monday with frontline gauges tumbling below its crucial 6,200 levels. The US markets had ended lower in last trading session on Friday after Bernanke’s speech acknowledging that economy has a long way to go to return to normal. Moreover, most of the Asian equity indices were trading in the red as weak services sector economic data from China dampened the sentiments. Meanwhile, Japanese Nikkei too declined around two percent as yen strengthened against the dollar. Back home, Investors’ sentiments got weak on street in late morning after a study report by industry body Assocham, said that uncertainty over the outcome of the upcoming Lok Sabha elections is likely to cast a shadow on the economy. Traders also remained cautious ahead of India’s services PMI to be announced later in the day. Sentiments also remained somber after the rupee depreciated and was trading at 62.43/44 versus its close of 62.16/17 on Friday tracking the dollar’s broad gains versus major currencies.

Sentiments continued to remain downbeat in noon trades on account of negative regional counterparts and also on dismal macro-economic report on the domestic front. Marking sixth consecutive monthly drop in output levels, activity in India's services sector shrank at a faster pace in December as new orders dwindled. The HSBC Services Purchasing Managers' Index (PMI), compiled by Market, fell to 46.7 in December from 47.2 in November. Thus, with no recovery in sight, nifty traded below the psychological 6200 mark, with loss of close to quarter of a percent.

Although, some recovery crept in the last hour of the trade, but that failed to reverse the negative trend of the 50 share index, which for fourth straight session on Monday ended in negative terrain, with loss of over quarter of a percent, below the crucial  6,200 levels. Meanwhile, broader indices outperformed larger peers for yet another session and captured gains in the range of 0.25%-0.95%.

Most of the NSE sectoral indices made a red closing; CNX Media up by 2.38%, CNX Pharma up by 0.45%, CNX FMCG up by 0.29%, CNX PSE up by 0.25% and CNX Metal up by 0.20% were the top gainers on index. On the other hand, CNX PSU Bank down by 1.87%, CNX Bank down by 1.19%, CNX Finance down by 0.77%, CNX Realty down by 0.75%, and CNX Service down by 0.64% were the top losers on index.

The India VIX increased by 3.96% at 16.50 as compared to its previous close of 15.87 on Friday. The 50-share CNX Nifty decreased by 19.70 points or 0.32% to settle at 6,191.45.

Nifty January 2014 futures closed at 6229.20 on Monday at a premium of 37.75 points over spot closing of 6,191.45, while Nifty February 2014 futures ended at 6269.50 at a premium of 78.05 points over spot closing. Nifty January futures saw an addition of 0.15 million (mn) units taking the total outstanding open interest (OI) to 17.76 mn units. The near month January 2014 derivatives contract will expire on January 30, 2014.

From the most active contracts, Tata Steel January 2014 futures traded at a premium of 3.90 points at 411.60 compared with spot closing of 407.70. The number of contracts traded was 11,380.

Aurobindo Pharma January 2014 futures were at a premium of 3.15 points at 414.00 compared with spot closing of 410.85. The number of contracts traded was 11,473. 

Reliance Industries January 2014 futures were at a premium of 7.20 points at 862.35 compared with spot closing of 855.15. The number of contracts traded was 13,132. 

ICICI Bank January 2014 futures were at a premium of 7.65 points at 1050.65 compared with spot closing of 1043.00. The number of contracts traded was 19,205. 

United Spirits January 2014 futures were at a premium of 31.10 points at 2748.20 compared with spot closing of 2717.10. The number of contracts traded was 14,162.  

 Among Nifty calls, 6,300 SP from the January month expiry was the most active call with an addition of 0.77 million in open interest.

Among Nifty puts, 6,200 SP from the January month expiry was the most active put with contraction of 0.21 million open interest.

The maximum OI outstanding for Calls was at 6,300 SP (4.85 mn) and that for Puts was at 6,200 SP (4.25 mn).

The respective Support and Resistance levels of Nifty are: Resistance 6220.68 -- Pivot Point 6195.47 - Support - 6166.23.

The Nifty Put Call Ratio (PCR) OI wise, stood at 0.96 for January month contract.

The top five scrips with highest PCR on OI were DR Reddy 1.95, Apollo Tyre 1.69, JSW Steel 1.23, Mcleodruss 1.09 and Kotak Bank 0.98.

Among most active underlying, SBI witnessed an addition of 0.20 million in Open Interest in the January month futures contract followed by United Spirits witnessed  an addition of 0.13 million of Open Interest in the January month contract; Reliance Industries witnessed an addition of 0.33 million of Open Interest in the January month futures. Infosys witnessed an addition of 0.01 million of Open Interest in the January month contract and ICICI Bank witnessed an addition of 0.42 million in Open Interest in the near month futures contract.