Weak global cues sent Nifty into a tizzy

Nifty ended at its lowest level in 10 weeks on Monday as weak economic data from China, the world's second largest economy, raised worries that the global growth is still struggling. Further, the US Fed's decision to further taper its monetary stimulus measures has also dampened sentiment in emerging markets.

Back home, Nifty made a negative opening in early trade. Sentiments remained down-beat on report that fiscal deficit in the first three quarters of the current fiscal year ending March touched 95.2% of the budgeted target for the whole year at Rs 5.16 lakh crore as compared with 78.8% a year ago. Market participants also remained on the sidelines ahead of the release of HSBC India Manufacturing PMI data scheduled to be announced later in the day. Some pessimism came in after CII survey showed that India’s economy is likely to grow in the range of 4.5 to 5% during the second half of the current fiscal. The market sentiments were also affected adversely by data showing that foreign institutional investors (FIIs) sold shares worth a net Rs 652.97 crore on January 31, 2014, as per provisional data from the stock exchanges.

During mid of the session the selling aggravated after Oil minister Veerappa Moily said that CNG prices will be cut by about Rs 15 per kg and piped natural gas by about Rs 5 per cubic metres in Delhi. Despite a small recovery attempt, street never looked confident and overlooked the good macro data of manufacturing, the HSBC Manufacturing Purchasing Managers' Index (PMI). Additionally, telecom related stocks viz. Bharti Airtel, Idea Cellular and Reliance Communication all edged lower on worries that aggressive bidding for the 900-MHz bandwidth with the entry of Reliance Jio would lead to higher costs for retaining the spectrum. The selling intensified in the final hours of trade however, Nifty barely held on to crucial psychological levels of 6000. Meanwhile, sectoral indices on the NSE made a negative closing.

CNX Metal down by 2.98%, CNX PSU Bank down by 2.48%, CNX Realty down by 2.10% , CNX Auto down by 1.95% and CNX IT down by 1.66%  were remained the top losers in the trade. While, CNX Pharma up by 1.13% and CNX Media up by 0.15% remained the gainer in the trade.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, up by 8.62% and reached 18.27.

Nifty February 2014 futures closed at 6039.70 on Monday at a premium of 37.90 points over spot closing of 6,001.80, while Nifty March 2014 futures ended at 6079.35 at a premium of 77.55 points over spot closing. Nifty February futures saw contraction of 0.17 million (mn) units taking the total outstanding open interest (OI) to 16.05 mn units. The near month February 2014 derivatives contract will expire on February 26, 2014.

From the most active contracts, Tata Motors February 2014 futures were at a premium of 1.75 points at 338.75 compared with spot closing of 337.00. The number of contracts traded was 11,045. 

Tata Steel February 2014 futures were at a premium of 3.10 points at 345.25 compared with spot closing of 342.15. The number of contracts traded was 8,110. 

Aurobindo Pharma February 2014 futures traded at a premium of 1.65 points at 471.95 compared with spot closing of 470.30. The number of contracts traded was 9,426.

ICICI Bank February 2014 futures were at a premium of 9.10 points at 971.10 compared with spot closing of 962.00. The number of contracts traded was 17,288. 

SBI February 2014 futures were at a discount of 0.75 points at 1486.20 compared with spot closing of 1486.95. The number of contracts traded was 31,616. 

  Among Nifty calls, 6,200 SP from the February month expiry was the most active call with an addition of 0.93 million in open interest.

Among Nifty puts, 6,000 SP from the February month expiry was the most active put with  an addition of 1.58 million open interests.

The maximum OI outstanding for Calls was at 6,200 SP (3.90 mn) and that for Puts was at 6,000 SP (7.34 mn). The respective Support and Resistance levels of Nifty are: Resistance 6052.95 -- Pivot Point 6023.7 - Support- 5972.55.

The Nifty Put Call Ratio (PCR) OI wise, finally stood at 1.30 for January month contract. The top five scrips with highest PCR on OI were Cairn 1.58, PNB 1.41, Divislab 1.38, HCL Tech 1.17 and Jindal Steel 1.13.

Among most active underlying, State Bank of India witnessed addition of 0.59 million of Open Interest in the January month futures contract, followed by United Spirits witnessing contraction of 0.21 million of Open Interest in the January month contract; Reliance Industries witnessed an addition of 0.21 million of Open Interest in the January month futures. ICICI Bank witnessed an addition of 0.38 million of Open Interest in the January month contract and Infosys witnessed an addition of 0.04 million in Open Interest in the expiring January month’s future contract.