Nifty discards gain to end flat on weak economic data from euro-zone, fall in rupee

Domestic benchmark S&P CNX Nifty managed to gain slight momentum and ended trade in green on Tuesday after being pulled in the red zone in the afternoon session due to fall in rupee and weak economic data from euro-zone. On the global front, snapping their four day’s losing streak, all the Asian equity indices ended the trade in the positive terrain on Tuesday as investors turned optimistic ahead of the meetings of Euro-zone policymakers and the wider group of seven (G7) industrialized nations. Meanwhile, Germany’s DAX turned flat after services purchasing managers’ index (PMI) fell to 51.8 in May from 52.2 in the previous month. France’s CAC was up 0.6%; its final services PMI was at 45.1 as against 45.2 during the same period. Back home, shares of aviation companies took off higher for second consecutive session on reports that the aviation ministry called for abolition of service tax on air tickets and reduction in sales tax on aviation fuel from an average 25% to a uniform 4%. Additionally, shares of fertiliser manufacturers gained on arrival of the monsoon season in Kerala, as this would boost demand for fertilizers.

Initially, the domestic benchmarks made positive start with Nifty recapturing its crucial 4,850 mark buoyed by firm Asian cues and recovery in rupee. Moreover, falling bond yields in Spain and Italy boosted confidence that Europe can avoid a messy breakup of its currency union. Back home, infrastructure stocks gained ahead of Finance Minister’s meeting to discuss issues about the sector on June 6, 2012. Reliance Infrastructure and BHEL were up 1.5-2%, Larsen & Toubro was up 0.5%. Moreover, Jaiprakash Associates gained 2% as Yamuna expressway is close to beginning operation. UP government is expected to finalize toll rates soon. Afterwards, market extended its gains and touched its intraday high near its crucial 4,900 mark supported by banking stocks, as they spurred by the optimism of rate cut after Reserve Bank of India’s deputy central bank governor, Subir Gokarn, stated that there was ‘elbow room' to cut interest rates to boost the country’s waning growth. Meanwhile, India's services sector grew at its fastest pace in three months during May too boosted the sentiments. HSBC’s services purchasing managers' index, compiled by Markit, rose to 54.7 in May from 52.8 in the previous month. But, Nifty started trimming its gains and turned red for a bit in afternoon trade as rupee changed its direction while, weak economic data from euro-zone too dampened the sentiments. The Indian rupee fell 18 paise to 55.84 a dollar, which gained more than 30 paise in morning trade. While, Spain and Italy’s services PMI declined while euro-zone services PMI dropped to 46.7 in May from 46.9 in April. Nifty, however, settled in the green with a marginal gain of about 15 points.

Meanwhile, most of the sectoral indices on the NSE were settled in the green, CNX PSU Bank remained the major gainer, up 1.78% followed by Bank Nifty up 1.05% and CNX Infra up by 0.81% while CNX Realty and CNX FMCG declined 1.15% and 1.08% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 2.57% and reached 26.26.

The India VIX witnessed an addition of 2.58% at 26.26 as compared to its previous close of at 25.60 on Monday.

The 50-share S&P CNX Nifty gain 15.15 by point or 0.31% to settle at 4863.30.

Nifty June 2012 futures closed at 4,846.30 at a discount of 17.00 points over spot closing of 4,863.30, while Nifty July 2012 futures were at 4,862.05 at a discount of 1.25 points over spot closing. The near month June 2012 derivatives contract will expire on Thursday i.e. June 28, 2012. Nifty June futures saw contraction of 0.06 million (mn) units taking the total outstanding open interest (OI) to 15.82 mn units.

From the most active contract, JP Associates June 2012 futures were at a premium of 0.20 point at 63.95 compared with spot closing of 63.75. The number of contracts traded was 8,543.

Tata Motors June 2012 futures were at a premium of 1.15 point at 222.75 compared with spot closing of 221.60. The number of contracts traded was 23,787.

HDIL June 2012 futures were flat compared with spot closing of 64.00. The number of contracts traded was 8,399.

Tata Steel June 2012 futures were at a discount of 4.35 point at 393.75 compared with spot closing of 398.10. The number of contracts traded was 8,816.

DLF June 2012 futures were at a premium of 1.40 point at 183.90 compared with spot closing of 182.50. The number of contracts traded was 8,352. 

Among Nifty calls, 5000 SP from the Jun month expiry was the most active call with an addition of 0.54 million open interest.

Among Nifty puts, 4500 SP from the Jun month expiry was the most active put with  an addition of 0.24 million open interest.

The maximum OI outstanding for Calls was at 5000 SP (5.38 mn) and that for Puts was at 4500 SP (6.75 mn).

The respective Support and Resistance levels are: Resistance 4892.26-- Pivot Point 4869.98--Support 4841.01.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.42 for Jun -month contract.

The top five scrips with highest PCR on OI were ABG Ship 7.33, NCC 1.67, Fortis 1.25, LT 2.00 and TechM 1.09.

Among the most active underlying, Suzlon witnessed contraction of 0.45 million of Open Interest in the June month futures contract followed by Tata Motors which witnessed an addition of 1.11 million of Open Interest in the near month contract. Meanwhile, RCOM witnessed an addition of 0.44 million in the June month futures. Also, Jaiprakash Associates witnessed contraction of 0.46 million in Open Interest in the June month contract. Finally, Sterlite Industries witnessed an addition of 1.81 million of Open Interest in the near month futures contract.