Nifty slumps on dismal IIP data

Indian markets witnessed a dismal day of trade and after a positive start the benchmark indices plunged to close near their lows of the day. While, most of the global indices tasted the cheers of accord signed by the European Union members, the Indian markets failed to respond. The trading volume remained high and the traders’ resorted hefty selling pressure on the markets, fearing more downside, even the European markets made a dismal start as Moody’s Investors Service said it will review debt ratings for countries in the region. Though, barring the Chinese markets all other Asian markets closed in green. China’s export growth slowed in November to the weakest pace since 2009, making the government more likely to further ease policies to sustain the expansion of the world’s second- largest economy.

Back home it was a complete mayhem at the street and all the sectoral gauges barring IT closed with considerable losses after the dismal IIP data of October month was released. The industrial output shrank for the first time in 28 months, coming at -5.1% compared to 11.37% in October 2010. The Reserve Bank of India has been reiterating that it is more concerned about inflation than growth, this negative growth will compel it to rethink at its monetary policy review later this week. On the sectoral front, metal was battered badly, losing 4%, closely followed by CNX PSU Banks down by 3.82%, CNX Infra down by 3.04%, CNX Energy 2.90% and CNX Auto by 2.67%, while CNX IT emerged the lone gainer, up by 0.96%. Nifty December futures saw addition of 9.75% or 1.92 million (mn) units taking the total outstanding open interest (OI) to 21.71 mn units.

.

The India VIX witnessed a contraction of 0.88% at 29.27 as compared to its previous close of 29.53 on Friday.

The 50-share S&P CNX Nifty offloaded 102.10 points or 2.10% to settle at 4,764.60.

Nifty December 2011 futures closed at 4,769.00 at a premium of 4.40 points over spot closing of 4,764.60, while Nifty January 2011 futures were at 4,794.15 at a premium of 29.55 points over spot closing. The near month December 2011 derivatives contract expires on Thursday, December 29, 2011. Nifty December futures saw addition of 9.75% or 1.92 million (mn) units taking the total outstanding open interest (OI) to 21.71 mn units.

From the most active contract by contract value, SBI’s December 2011 futures were at a discount of 6.00 point at 1766.00 compared with spot closing of 1772.00. The number of contracts traded was 44,461.

L&T December 2011 futures were at a premium of 3.80 point at 1197.00 compared with spot closing of 1193.20. The number of contracts traded was 14,843.

ICICI Bank December 2011 futures were at a premium of 2.90 at 709.45 compared with spot closing of 706.55. The number of contracts traded was 23,941.

Infosys December 2011 futures were at a premium of 3.00 points at 2741.00 compared with spot closing of 2738.00. The number of contracts traded was 12,473.

RIL December 2011 futures were at a premium of 3.25 point at 730.05 compared with spot closing of 726.80. The number of contracts traded was 21,276.

Among Nifty calls, 4900 SP from the December month expiry was the most active call with an addition of 0.22 million or 4.84%.

Among Nifty puts, 4700 SP from the December month expiry was the most active put with a addition of 0.37 million or 4.59%.

The maximum Call OI outstanding for Calls was at 4900 SP (4.74 mn) and that for Puts was at 4700 SP (8.60 mn).

The respective Support and Resistance levels are: Resistance 4864.71 -- Pivot Point 4810.13 -- Support 4710.01.

The Nifty Put Call Ratio (PCR) OI wise stood at 4.71 for December -month contract.

The top five scrips with highest PCR on OI were Patni 11.88, Voltas 6.00, Bombay Rayon Fashions 4.00, Cipla 2.03 and Mphasis 1.50.

Among most active underlying, SBI witnessed an addition of 3.79% of Open Interest in the December month futures contract followed by Reliance Industries which witnessed an addition of 0.29% of Open Interest in the near month contract. Meanwhile ICICI Bank witnessed an addition of 0.40% in the December month futures. Also, Tata Steel witnessed an addition of 2.43% in Open Interest in the December month contract. Finally, Tata Motors witnessed an addition of 3.78% of Open Interest in the near month futures contract.