Disappointing March IIP drags Nifty below 4,950 mark

Bears continued to hold their control over the Indian market with S&P Nifty ending the day’s trade in the red for fourth day in a row on Friday on account of fall in global markets on Greece woes and disappointing industrial output data for March. The global cues remained unsupportive as all the regional peers ended the day’s trade in the negative terrain as investors remained worried over the euro-zone debt crisis as politicians in Greece struggled to form a coalition after pro-austerity parties were lashed in weekend elections. Moreover, the sentiments also dampened after fresh euro-zone concerns re-emerged over Greece and Spain. Back home, the rupee dropped to an intraday low of 53.61 to the dollar while the 10-year bond yield fell 2 basis points to 8.54 percent.

Initially, market opened in the red following subdued trend on regional peers. The Asian markets were down on reports that showed leading US bank JPMorgan suffered a $2 billion trading loss from a failed hedging strategy, as positions in credit securities proved riskier than expected. Meanwhile, Auto stocks edged lower in the earlier trade after data showed passenger car sales in India witnessed slowest growth during April in 10 years. In the mid morning trade, selling intensified and market breached its crucial 4,950 mark after industrial output data for March came way below the street expectation. India’s industrial output unexpectedly contracted 3.5 percent in March as against 4.1 percent in February. The street had expected output to grow 1.5 percent. Capital goods, mining and manufacturing sectors too came in negative. The mood of the investors also got gloomy after the Directorate General of Civil Aviation blasted at airlines over the rise in fares on certain routes by around 15-20%. The aviation regulator observed that during the reviewed course of time there was no significant rise in the cost of operations of the airlines. Selling in the frontliners sent the index near its crucial 4,900 mark but, index got huge support at that level and bargain hunting in fundamentally strong stocks helped the market to pare all of its losses and recapturing its crucial 4,950 mark. Market’s afternoon attempt to turn positive proved to be short lived. Finally, Nifty breached its crucial 4,950 level once again and snapped the day’s trade with a cut of 0.75%.

Meanwhile, most of the sectoral indices on the NSE were settled in the red, CNX Pharma remained the major loser, down 2.34% followed by CNX FMCG down 1.43% and CNX Metal down by 1.19% while CNX Auto and CNX PSU Bank surged 0.52% and 0.32% respectively remained the only gainers in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 1.05% and reached 22.48.

The India VIX witnessed contraction of 1.06% at 22.48 as compared to its previous close of at 22.72 on Thursday.

The 50-share S&P CNX Nifty lost 36.80 points or 0.74% to settle at 4928.90.

Nifty May 2012 futures closed at 4931.35 at a premium of 2.45 points over spot closing of 4928.90, while Nifty June 2012 futures were at 4945.00 at a premium of 16.10 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 0.39 million (mn) units taking the total outstanding open interest (OI) to 20.51 mn units.

From the most active contract, Tata Motors May 2012 futures were at a premium of 1.55 point at 298.85 compared with spot closing of 297.30. The number of contracts traded was 19,617.

HDIL May 2012 futures were at a premium of 0.60 point at 64.90 compared with spot closing of 64.30. The number of contracts traded was 12,221.

Tata Steel May 2012 futures were at a premium of 1.25 points at 411.70 compared with spot closing of 410.45. The number of contracts traded was 14,177.

Reliance Industries May 2012 futures were at a discount of 5.45 point at 692.55 compared with spot closing of 698.00. The number of contracts traded was 12,402.

IRB May 2012 futures were at a premium of 1.50 point at 105.70 compared with spot closing of 104.20. The number of contracts traded was 8,334.

Among Nifty calls, 5200 SP from the May month expiry was the most active call with an addition of 0.27 million open interest.

Among Nifty puts, 4900 SP from the May month expiry was the most active put with contraction of 0.24 million open interest.

The maximum OI outstanding for Calls was at 5200 SP (7.17mn) and that for Puts was at 4900 SP (6.81mn).

The respective Support and Resistance levels are: Resistance 4968.05-- Pivot Point 4937.1--Support 4897.95.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.90 for May -month contract.

The top five scrips with highest PCR on OI were ABG Ship 49.00, Siemens 2.50, Finan tech 2.00 and MRPL 2.00 and Ind Hotel 1.31

Among the most active underlying, Suzlon witnessed contraction of 1.51 million of Open Interest in the April month futures contract followed by IFCI which witnessed an addition of 0.35 million of Open Interest in the near month contract. Meanwhile, RCOM witnessed contraction of 0.85 million in the April month futures. Also, JP Associates witnessed contraction of 2.08 million in Open Interest in the April month contract. Finally, Tata Motors witnessed an addition of 1.21 million of Open Interest in the near month futures contract.