Nifty ends on a flat note; QE tapering looms large

Nifty, ended the volatile session on a flat note with negative bias on account selling witnessed on metal, realty and banking stocks in the last hour of trade. On the global front, Asian markets shut shop in green amid positive global cues as Turkey’s central bank increased interest rates to halt a currency slide that roiled global markets. European markets too opened higher on Wednesday.

Back home, Nifty made a gap up opening buoyed by the positive global cues as the US markets ended higher overnight on the back of good economic data and some encouraging earnings announcements. Market continued positive trade as buying was witnessed in pharma, PSE and IT stocks. Investors were also seen piling up position on fundamentally strong stocks available at cheaper valuation after last three sessions drubbing. However, in the last leg of trade, Nifty paired all gains amid heavy selling witnessed in the metal, media and banking stocks as investors turned cautious ahead of January series Futures & Options (F&O) contracts expiring on January 30 and the outcome of the US Federal Open Market Committee meeting that ends today. Finally, Nifty ended the session near the neutral line with a marginal loss of 6 points.

Meanwhile, sectoral indices on the NSE made a mixed closing. CNX PSE up by 0.75%, CNX Pharma up by 0.66%, CNX IT up by 0.60%, CNX MNC up by 0.55%, and CNX Infra up by 0.27% remained the top gainers in the trade. While, CNX PSU Bank down 1.57%, CNX Metal down 1.33%, CNX Media down 1.10%, CNX Realty down 0.67% and CNX Finance down 0.45% remained the top losers in the trade.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, up by 1.81% and reached 18.04.

Nifty January 2014 futures closed at 6120.80 on Wednesday at a premium of 0.55 points over spot closing of 6,120.25, while Nifty February 2014 futures ended at 6154.65 at a premium of 34.40 points over spot closing. Nifty January futures saw contraction of 2.10 million (mn) units taking the total outstanding open interest (OI) to 8.69 mn units. The near month January 2014 derivatives contract will expire on January 30, 2014.

From the most active contracts, Reliance Industries January 2014 futures were at a premium of 1.25 points at 836.85 compared with spot closing of 835.60. The number of contracts traded was 18,820. 

ICICI Bank January 2014 futures were at a premium of 1.70 points at 1003.90 compared with spot closing of 1002.20. The number of contracts traded was 39,244. 

SBI January 2014 futures traded at a premium of 5.95 points at 1578.25 compared with spot closing of 1572.30. The number of contracts traded was 49,554.

Axis Bank January 2014 futures traded at a discount of 5.05 points at 1138.50 compared with spot closing of 1143.55. The number of contracts traded was 20,783.

United Spirits January 2014 futures were at a premium of 12.15 points at 2623.25 compared with spot closing of 2611.10. The number of contracts traded was 17,302.

Among Nifty calls, 6,300 SP from the January month expiry was the most active call with an addition of 1.08 million in open interest.

Among Nifty puts, 6,100 SP from the January month expiry was the most active put with  an addition of 0.40 million open interests.

The maximum OI outstanding for Calls was at 6,200 SP (4.70 mn) and that for Puts was at 6,000 SP (5.16 mn). The respective Support and Resistance levels of Nifty are: Resistance 6157.20 -- Pivot Point 6133.50 - Support- 6096.55.

The Nifty Put Call Ratio (PCR) OI wise, stood at 0.83 for January month contract. The top five scrips with highest PCR on OI were DR Reddy 3.62, HCL Tech 2.12, Infosys 2.10, HDFC 1.54 and IOC 1.44.

Among most active underlying, Maruti Suzuki witnessed contraction of 0.83 million of Open Interest in the January month futures contract, followed by ICICI Bank witnessing contraction of 1.72 million of Open Interest in the January month contract; SBI witnessed contraction of 1.37 million of Open Interest in the January month futures. Infosys witnessed contraction of 0.41 million of Open Interest in the January month contract and Auro Pharma witnessed contraction of 0.23 million in Open Interest in the near month futures contract.