Nifty ends below 6250 levels on negative global cues; WPI data eyed

Nifty made opening in red in early deals on Tuesday as investors booked most of their previous session’s profit amid weak global cues. The US markets went for a sharp correction overnight, reacting to the disappointing non-farm payroll data, traders were also worried about the ensuing earnings season. Moreover, most of the Asian equity indices were trading in the red led by Japanese Nikkei, which tumbled over two percent as the yen hovered near a four-week high against the dollar after last week's surprisingly weak jobs report raised concerns about the U.S. growth outlook.

During late morning, selling emerged on street in blue chip front line stocks. Investors remained cautious ahead of WPI inflation data to be released tomorrow, which will determine the RBI’s stance on key policy rates in its coming monetary policy review. However, investors’ sentiments got some support as global rating agency Fitch said that the government's efforts to avoid non plan expenditures to achieve the fiscal deficit target of 4.8 percent of the GDP in 2013-14, are supportive for the country's credit rating. Moreover, sentiments also got some support after the Consumer Price Inflation for December fell sharply to 9.87% compared with 11.16% in November. Food inflation decreased to 12.16% compared with 14.72 in November. Selling got intensified during noon trade after European markets opened in red after data showed consumer price inflation rose last month in France. Separately, data showed the nation’s current account deficit narrowed to $1.90 billion from $2 billion, better than expectations for a $2.3 billion deficit.

Last leg of trade turned out to be a disappointing one as market participants booked profit due to lack of supportive cues from global front which settled index near day’s low, below the crucial 6250 levels respectively, with cut of close to half a percent. Meanwhile, broader indices, following suite, also ended with losses in the range of 0.15%-0.25%.

Most of the NSE sectoral indices made a green closing; CNX Pharma up by 0.72% was the top gainers on index. On the other hand, CNX Media down by 2.55%, CNX Metal down by 1.57%, CNX Realty down by 1.53%, CNX PSE down by 0.89% and CNX Bank down by 0.66% were the top losers on index.

The India VIX decreased by 1.31% at 15.74 as compared to its previous close of 15.95 on Monday. The 50-share CNX Nifty decreased by 30.90 points or 0.49% to settle at 6,241.85.

Nifty January 2014 futures closed at 6256.50 on Tuesday at a premium of 14.65 points over spot closing of 6,241.85, while Nifty February 2014 futures ended at 6290.50 at a premium of 48.65 points over spot closing. Nifty January futures saw an addition of 0.17 million (mn) units taking the total outstanding open interest (OI) to 17.74 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 were at a premium of 1.75 points at 376.00 compared with spot closing of 374.25. The number of contracts traded was 12,440. 

Ranbaxy Laboratories January 2014 futures traded at a premium of 2.85 points at 432.25 compared with spot closing of 429.40. The number of contracts traded was 8,048.

Reliance Industries January 2014 futures were at a premium of 4.65 points at 883.85 compared with spot closing of 879.20. The number of contracts traded was 18,016. 

ICICI Bank January 2014 futures were at a premium of 2.7 points at 1041.70 compared with spot closing of 1,039.00. The number of contracts traded was 15,375. 

United Spirits January 2014 futures were at a premium of 15.90 points at 2777.90 compared with spot closing of 2,762.00. The number of contracts traded was 8,959.   Among Nifty calls, 6,300 SP from the January month expiry was the most active call with an addition of 0.44 million in open interest.

Among Nifty puts, 6,200 SP from the January month expiry was the most active put with contraction of 0.18 million open interest.

The maximum OI outstanding for Calls was at 6,300 SP (5.23mn) and that for Puts was at 6,200 SP (6.26 mn).

The respective Support and Resistance levels of Nifty are: Resistance 6270.08 -- Pivot Point 6252.12 - Support - 6223.88.

The Nifty Put Call Ratio (PCR) OI wise, stood at 1.10 for January month contract.

The top five scrips with highest PCR on OI were DR Reddy 2.85, Infosys 1.77, Jublfood 1.40, Apollo Tyre 1.37 and HCL Tech 1.24.

Among most active underlying, SBI witnessed an addition of 0.06 million in Open Interest in the January month futures contract followed by Infosys witnessed an addition of 0.08 million of Open Interest in the January month contract; United Spirits witnessed an addition of 0.06 million of Open Interest in the January month futures. Reliance Industries witnessed an addition of 0.09 million of Open Interest in the January month contract and ICICI Bank witnessed an addition of 0.05 million in Open Interest in the near month futures contract.