Nifty skids lower for third day in a row; IIP numbers eyed

After witnessing bloodbath in previous two sessions, S&P Nifty continued its southbound journey for third day in a row on Thursday and snapped the volatile day of trade in the red. Though, market started in the green on the back of bargain hunting after two consecutive days of drubbing. On the global front, the sentiments remained choppy as the US markets plunged further overnight with Dow extending its losing streak for the sixth consecutive day while, Asian counters too remained choppy with Hang Seng witnessed a cut of half a percent after China reported slower export growth. Country’s exports rose 4.9 percent in April, much below the 8.5 percent estimate. European counters too were mostly in the red at this point of time. Back home, investors will be watching tomorrow’s Index of Industrial Production (IIP) numbers for further direction while, the Indian rupee appreciated by 50 paise to trade at 53.31 a dollar against its previous close of 53.82.

Initially, market got off a great start with Nifty recapturing 5,000 mark mainly spurred after the Reserve Bank of India (RBI) fixed the intra-day open position limit in forex trade at 5 times the available limit, and asked EEFC account holders to convert 50 percent of forex earnings into rupees within two weeks. The RBI said that exporters will be required to convert 50 percent of their foreign exchange holdings into rupees, in a move to support the sagging local currency. Afterwards, the benchmark traded firmly in the tight-band as sentiments got some support with the report that India's trade deficit in the first month of the fiscal narrowed slightly to $13.4 billion in April, slightly lower than March’s $13.9 billion. But, in the noon trade market started its south bound journey witnessing a steep fall of about 80 points and turned red following subdued opening in European counterparts. Last hour of trade remained very volatile as market traded between negative and positive as investors remained sideline ahead of IIP numbers. Meanwhile, Auto sector came under pressure after Society of Indian Automobile Manufacturers (SIAM) reported that Car sales in India rose an annual 3.4 percent in April, much below the 20 percent in March. Finally, Nifty ended the session with a marginal cut of about 10 points.

Meanwhile, most of the sectoral indices on the NSE were settled in the red, CNX Metal remained the major loser, down 1.23% followed by CNX PSU Bank down 1.04% and CNX Media down by 0.93% while CNX Energy and CNX PSE surged 0.19% and 0.13% respectively remained the only gainers in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 1.38% and reached 22.72.

The India VIX witnessed contraction of 1.39% at 22.72 as compared to its previous close of at 23.04 on Wednesday.

The 50-share S&P CNX Nifty lost 9.10 points or 0.18% to settle at 4965.70.

Nifty May 2012 futures closed at 4966.80 at a premium of 1.10 points over spot closing of 4965.70, while Nifty June 2012 futures were at 4982.55 at a premium of 16.85 points over spot closing. The near month May 2012 derivatives contract will expire on Thursday i.e. May 31, 2012. Nifty May futures saw an addition of 0.20 million (mn) units taking the total outstanding open interest (OI) to 20.12 mn units.

From the most active contract, Tata Motors May 2012 futures were at a premium of 0.55 point at 290.35 compared with spot closing of 289.80. The number of contracts traded was 12,739.

HDIL May 2012 futures were at a premium of 0.35 point at 63.45 compared with spot closing of 63.10. The number of contracts traded was 13,215.

IDFC May 2012 futures were at a premium of 0.45 points at 118.90 compared with spot closing of 118.45. The number of contracts traded was 8,786.

DLF May 2012 futures were at a premium of 0.40 point at 186.50 compared with spot closing of 186.10. The number of contracts traded was 8,869.

Tata Steel May 2012 futures were at a discount of 1.65 point at 414.00 compared with spot closing of 415.65. The number of contracts traded was 13,275.

Among Nifty calls, 5200 SP from the May month expiry was the most active call with an addition of 0.30 million open interest.

Among Nifty puts, 4900 SP from the May month expiry was the most active put with an addition of 0.54 million open interest.

The maximum OI outstanding for Calls was at 5200 SP (6.89mn) and that for Puts was at 4900 SP (7.06mn).

The respective Support and Resistance levels are: Resistance 5019.9-- Pivot Point 4985.1--Support 4930.9.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.94 for May -month contract.

The top five scrips with highest PCR on OI were ABG Ship 49.00, Union Bank 2.38, Siemens 2.33, Finan tech 2.00 and MRPL 2.00.

Among the most active underlying, Suzlon witnessed an addition of 3.01 million of Open Interest in the April month futures contract followed by IFCI which witnessed an addition of 0.57 million of Open Interest in the near month contract. Meanwhile, JP Associates Infra witnessed contraction of 2.14 million in the April month futures. Also, RCOM witnessed contraction of 0.72 million in Open Interest in the April month contract. Finally, Tata Motors witnessed contraction of 0.17 million of Open Interest in the near month futures contract.