Nifty ends marginally lower on account of selling in selected index heavyweights

Amidst a volatile trading session and fluctuating levels, Nifty ended marginally lower as selling by foreign institutional investors in index heavyweights capped upside gains. However, the global cues mostly remained good, as majority of the Asian markets ended in green, with some even gaining around two percent for the day, heading for their longest stretch of gains this year. The European markets too made a good start and some of the equity markets rebounded from their worst start to the year since 2010, amid buzz that euro zone probably notched up a third quarter of growth at the end of 2013. 

Back home, Nifty made a green start in morning deals. There was some early cheer in the markets after the US jobs data came weaker than expected, the CSO kept its growth forecast for FY13-14 at sub 5% percent but the estimates were better than the general expectations. Investors remained on the sidelines in late morning as the HSBC's composite emerging markets index of manufacturing and services purchasing managers’ survey slipped for the second straight month to 51.4 in January, the slowest pace in four months. The broader indices were holding their gains though some of the sectoral indices lost their way and slipped into red after a positive start.

A bout of selling which emerged in the last hour of trade mainly dragged the market to day’s low point after flip-flop session. By close of trade, Nifty managed to settle above the crucial 6,050 levels. The decline in the market was also induced by the weakness in domestic currency, which after a good start turned soft in latter part of the day. Also, there was concern of foreign fund outflow as the provisional data showed that overseas investors sold Rs 267 crore worth of Indian shares on Friday, extending their selling streak to a seventh day.

Meanwhile, sectoral indices on the NSE made a positive closing. CNX Finance down by 0.85%, CNX Service down by 0.84%, CNX MNC down by 0.65%, CNX Infra down by 0.63% and CNX Consumption down by 0.67% were remained the top losers in the trade. While, CNX Realty up by 1.30%, CNX Pharma up by 0.77%, CNX Energy up by 0.49%, CNX Auto up by 0.46%, and CNX PSE up by 0.11% remained the gainer in the trade.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, up by 2.69% and reached 19.05 .The 50-share CNX Nifty decreased by 9.75 points or 0.16% to settle at 6,053.45.

Nifty February 2014 futures closed at 6064.60 on Monday at a premium of 11.15 points over spot closing of 6,053.45, while Nifty March 2014 futures ended at 6098.80 at a premium of 45.35 points over spot closing. Nifty February futures saw an addition of 0.04 million (mn) units taking the total outstanding open interest (OI) to 15.43 mn units. The near month February 2014 derivatives contract will expire on February 26, 2014.

From the most active contracts, DLF February 2014 futures were trading flat compared to spot closing of 141.90. The number of contracts traded was 8,438. 

Tata Motors February 2014 futures were at a premium of 1.35 points at 365.15 compared with spot closing of 363.80. The number of contracts traded was 14,179. 

Idea Cellular February 2014 futures were at a premium of 0.90 points at 127.20 compared with spot closing of 126.30. The number of contracts traded was 9,671. 

Reliance Industries February 2014 futures were at a premium of 2.40 points at 824.15 compared with spot closing of 821.75. The number of contracts traded was 14,251. 

Tata Steel February 2014 futures traded at a premium of 1.35 points at 383.90 compared with spot closing of 382.55. The number of contracts traded was 17,982.Among Nifty calls, 6,200 SP from the February month expiry was the most active call with an addition of 0.05 million in open interest.

Among Nifty puts, 6,000 SP from the February month expiry was the most active put with  an addition of 0.37 million open interests.

The maximum OI outstanding for Calls was at 6,200 SP (6.24 mn) and that for Puts was at 6,000 SP (8.71 mn).

The respective Support and Resistance levels of Nifty are: Resistance 6075.53-- Pivot Point 6060.97 - Support- 6038.88.

The Nifty Put Call Ratio (PCR) OI wise, finally stood at 1.30 for February month contract. The top five scrips with highest PCR on OI were Auro Pharma 1.69, Grasim 1.28, ACC 1.27, PNB 1.22, and Cairn 1.13.

Among most active underlying, State Bank of India witnessed  an addition of 0.12 million of Open Interest in the February month futures contract, followed by Reliance Industries witnessing  contraction of 0.26 million of Open Interest in the February month contract; United Spirits witnessed  addition of 0.10 million of Open Interest in the February month futures. ICICI Bank witnessed contraction of 0.53 million of Open Interest in the February month contract and TCS witnessed an addition of 0.48 million in Open Interest in the expiring February month’s future contract.