Nifty closes well below 6,300 levels on profit booking

Pressurized by weak global cues, Nifty opened in the red in early morning trade taking cues from the US markets that returned to the somber mood and ended mostly lower overnight on getting a mixed batch of economic data. There was stronger than expected regional manufacturing growth but an unexpected pullback in homebuilder confidence. Moreover, most of the Asian markets were trading in the red terrain with Japanese Nikkei extending its losses from the previous session as stronger yen weighed on investor sentiments. Some cautiousness also came in late morning as the Global ratings agency Moody’s underscored that India’s economic recovery is likely to be slow in the second half of 2014 and the outcome of general elections could have an impact on the growth prospects. Sentiments also remained dampened after TCS’ Q3 result fell short of market expectations.

Selling was intensified in noon trades in banking stocks after the industry body Assocham underscored that the growth of Indian banking industry is likely to remain under pressure with gross non-performing assets (NPAs) expected to touch 5 percent of total loans by March this year. Last trading session of the week turned out to be a major disappointment for Index, which ended with losses close to a percent, below the crucial 6,300 levels respectively.

Most of the NSE sectoral indices made a red closing; CNX Realty down by 2.58%, CNX IT down by 2.40%, CNX Service down by 1.82%, CNX Finance down by 1.69% and CNX PSU Bank down by 1.66% was the top losers on index. On the other hand, there was no gainer on index.

The India VIX decreased by 0.83% at 15.41 as compared to its previous close of 15.54 on Thursday. The 50-share CNX Nifty decreased by 57.25 points or 0.91% to settle at 6,261.65.

Nifty January 2014 futures closed flat on Friday over spot closing of 6,261.65, while Nifty February 2014 futures ended at 6300.80 at a premium of 39.15 points over spot closing. Nifty January futures saw contraction of 1.04 million (mn) units taking the total outstanding open interest (OI) to 17.98 mn units. The near month January 2014 derivatives contract will expire on January 30, 2014.

From the most active contracts, Reliance Communications January 2014 futures were at a discount of 0.50 points at 124.45 compared with spot closing of 124.95. The number of contracts traded was 11,902. 

ITC January 2014 futures traded at a discount of 0.05 points at 324.95 compared with spot closing of 325.00. The number of contracts traded was 11,255.

HDFC Bank January 2014 futures were at a discount of 5.05 points at 667.10 compared with spot closing of 672.15. The number of contracts traded was 43,293.  

Reliance Industries January 2014 futures were at a premium of 1.30 points at 884.80 compared with spot closing of 883.50. The number of contracts traded was 21,790. 

ICICI Bank January 2014 futures were at a premium of 4.10 points at 1038.60 compared with spot closing of 1,034.50. The number of contracts traded was 16,750. 

 Among Nifty calls, 6,300 SP from the January month expiry was the most active call with an addition of 0.48 million in open interest.

Among Nifty puts, 6,200 SP from the January month expiry was the most active put with contraction of 0.95 million open interest.

The maximum OI outstanding for Calls was at 6,300 SP (5.22 mn) and that for Puts was at 6,200 SP (5.58 mn).

The respective Support and Resistance levels of Nifty are: Resistance 6310.38 -- Pivot Point 6278.37 - Support - 6229.63.

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 2.99, Infosys 2.09, HCL Tech 1.75, HDFC 1.65 and Apollo Tyre 1.40.

Among most active underlying, SBI witnessed an addition of 0.11 million of Open Interest in the January month futures contract followed by Infosys witnessed contraction of 0.16 million of Open Interest in the January month contract; United Spirits witnessed contraction of 0.09 million of Open Interest in the January month futures. Reliance Industries witnessed contraction of 0.54 million of Open Interest in the January month contract and TCS witnessed contraction of 0.23 million in Open Interest in the near month futures contract.