Market trims losses; ends marginally lower amid weakening rupee

After witnessing bloodbath in the first half, domestic benchmark CNX S&P Nifty pared most of its losses and ended the day’s trade with a marginal cut of about 20 points as recovery in banking stocks helped the sentiments. However, the sentiments remained dampened as the Indian rupee continued to trade around record low of 57.25, down 95 paise against the dollar today on increased capital outflows and rising demand from importers for the American currency. Besides, strengthening of dollar against the euro also kept pressure on the local unit. On the global front, the US markets dropped sharply overnight, taking their second hardest knock so far this year as economic reports indicated a slowdown in global manufacturing, increased investor anxiety while, most of the Asian equity indices ended the day’s trade in the red. Moreover, all the European indices were trading in the negative territory at this point of time.

Earlier, the Indian equity market made a gap-down start tracking weakness in equity markets across the globe. Global markets fell sharply on the back of gloomy economic reports from the US and China. Credit downgrade of world’s 15 major banks by Moody’s also dampened the investor’s sentiments. Selling intensified in the early noon trade and Nifty breached its crucial 5,100 mark for a while tracing weakness in rupee. Moreover, subdued opening in European counters too dampened the investors’ sentiment. Meanwhile, the cement stocks traded under pressure after the competition watchdog, Competition Commission of India (CCI), levied a hefty penalty of over Rs 6,000 crore on 11 leading cement companies for price cartelization. Moreover, telecom stocks tumbled as the much-awaited E-GoM meeting headed by Finance Minister Pranab Mukherjee, to finalize a base price for sale of spectrum, was deferred indefinitely. But, in the mid noon trade market took U-turn and started paring its initial losses following short covering in banking counters. The sentiment was also supported by report that India’s crucial monsoon rains are still expected to be average in 2012, the weather office said on Friday, helping to allay concerns over farm output in the major producer and consumer of food stuffs triggered by sparse rainfall in the last few weeks. Finally, Nifty ended the day’s trade near its intraday high but, marginally in red near its crucial 5,150 mark. 

Meanwhile, CNX Metal lost the most, down by 1.53% on the NSE sectoral index followed by CNX Infra down by 0.47%, CNX FMCG down by 0.32% while, CNX Realty and CNX Auto up by 0.35% and 0.08% remained the top gainers in the trade, respectively. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, rose 3.20% and reached 20.58.

The India VIX witnessed an addition of 3.21% at 20.58 as compared to its previous close of at 19.94 on Thursday.

The 50-share S&P CNX Nifty lost 18.95 by point or 0.37% to settle at 5.146.05.

Nifty June 2012 futures closed at 5,151.15 at a premium of 5.10 points over spot closing of 5,146.05, while Nifty July 2012 futures were at 5,171.65 at a premium of 25.60 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 0.47 million (mn) units taking the total outstanding open interest (OI) to 16.87 mn units.

From the most active contract, HDIL June 2012 futures were at a premium of 0.20 point at 82.10 compared with spot closing of 81.90. The number of contracts traded was 32,268.

Tata Motors June 2012 futures were at a premium of 0.30 point at 247.30 compared with spot closing of 247.00. The number of contracts traded was 23,588.

DLF June 2012 futures were at a premium of 0.55 point at 194.25 compared with spot closing of 193.70. The number of contracts traded was 17,422.

ICICI Bank June 2012 futures were at a premium of 0.15 point at 852.95 compared with spot closing of 852.80. The number of contracts traded was 21,746.

Reliance Industries June 2012 futures were at a premium of 2.75 point at 712.95 compared with spot closing of 710.20. The number of contracts traded was 14,876.   

Among Nifty calls, 5300 SP from the Jun month expiry was the most active call with contraction of 0.64 million open interest.

Among Nifty puts, 4800 SP from the Jun month expiry was the most active put with an addition of 0.28 million open interest.

The maximum OI outstanding for Calls was at 5300 SP (7.61mn) and that for Puts was at 4800 SP (9.02mn).

The respective Support and Resistance levels are: Resistance 5172.56-- Pivot Point 5133.28--Support 5106.76.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.82 for June-month contract.

The top five scrips with highest PCR on OI were ABG Ship 6.17, Orient Bank 5.00, Welcorp 3.44, TATA Chemical 3.00 and ABB 2.50

Among the most active underlying, IFCI witnessed contraction of 1.45 million of Open Interest in the June month futures contract followed by Alok Industries which witnessed an addition of 21.45 million of Open Interest in the near month contract. Meanwhile, RCOM witnessed an addition of 2.41 million in the June month futures. Also, Jaiprakash Associates witnessed contraction of 2.64 million in Open Interest in the June month contract. Finally, Tata Motors witnessed contraction of 1.01 million of Open Interest in the near month futures contract.