Nifty continues to wilt on concern over global outlook

 After yesterday’s nightmarish session, Nifty continued its south-bound journey and snapped the volatile day of trade below its crucial 4,900 mark on Friday as investors fled risky assets across global markets on concern over global outlook. However, market recovered in mid-noon trades but, clobbered out of shape in late trade and ended the session with a cut of over a percentage point. Earlier, the Indian equity market made a gap down start and butchered in the early trade breaching its crucial 4,900 level as global concern spooked the markets sentiments. But market, came off from its early lows recapturing its crucial 4,900 mark helped by software stocks like Infosys, TCS, Wipro and HCL Tech which edged higher in the trade after the rupee weakened to 50 against the dollar on Friday, a level not seen in more than 28-months, as investors globally continued to dump high yielding riskier assets for the safety of government bonds. Afterwards, market witnessed a steep fall in mid-morning trade as metal and mining stocks extended their yesterday’s steep losses on weak economic data from China, the world’s largest consumer of aluminum and copper. Shares like Sterlite Industries, Sail, Welspun Corp, Hindalco Industries, Tata Steel, Sesa Goa all ended the trade with a cut of 1-4 percent. In early noon trade, the benchmark witnessed an exceptional recovery of about 80 points as European counterparts opened on a strong note and the domestic index touched its green terrain for the first time in the day’s trade in the mid-morning trade. But, it was the final hour of trade where the market lost its control and got clobbered out of shape. Finally, Nifty ended the volatile day of trade with a cut of over 50 points below its crucial 4,900 mark as sentiment weighed down in late trade.

On the global front, the US markets continued their plunge for yet another day with major indices deposing more than three percent overnight while, all the Asian equity indices barring Jakarta Composite continued their downfall for second straight day amid growing fears that the global economy is on the verge of slipping back into recession. Moreover, all the European counterparts were trading in the red at this point of time after a firm opening. Back home, most of the sectoral indices on the NSE were hammered and settled in the negative territory with Bank Nifty losing the most, ending with a cut of over one and a half percent followed by CNX Service down by 1.00% and CNX Energy down by 0.92% while, CNX PSU Bank and CNX FMCG rose 0.66% and 0.17% respectively on NSE sectoral space. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 3.77% and reached 35.16, while S&P Nifty dropped by 55.90 points or 1.14% to close at 4,867.75.

The India VIX gained by 3.77% at 35.16 as compared to its previous close of 33.88 on Thursday.

The 50-share S&P CNX Nifty lost 55.90 points or 1.14% and settled at 4,867.75.Nifty September 2011 futures closed at 4,865.25 at a discount of 2.50 points over spot closing of 4,867.75, while Nifty October 2011 futures were at 4,883.35 at a premium of 15.60 points over spot closing. The near month September 2011 derivatives contract expires on Thursday, September 29, 2011. Nifty September futures saw addition of 10.83% or 2.60 million (mn) units, taking the total outstanding open interest (OI) to 26.62 mn units.

From the most active contract by contract value, SBI’s September 2011 futures were at a premium of 1.95 point at 1958.95 compared with spot closing of 1957.00. The number of contracts traded was 51,837.

RIL September 2011 futures were at a premium of 3.00 point at 771.00 compared with spot closing of 768.00. The number of contracts traded was 42,394.

L&T September 2011 futures were at a discount of 2.95 point at 1451.00 compared with spot closing of 1453.95. The number of contracts traded was 17,237.

Tata Steel September 2011 futures were at a discount of 3.20 point at 430.10 compared with spot closing of 433.30. The number of contracts traded was 24,693.

ICICI Bank September 2011 futures were at a discount of 1.70 point at 841.30 compared with spot closing of 843.00. The number of contracts traded was 24,783.

Among Nifty calls, 4900 SP from the September month expiry was the most active call with an addition of 0.33 million or 6.91%.

Among Nifty puts, 4800 SP from the September month expiry was the most active put with contraction of 0.17 million or 1.99%.

The maximum Call OI outstanding for Calls was at 4900 SP (5.23 mn) and that for Puts was at 4800 SP (8.66 mn).

The respective Support and Resistance levels are: Resistance 4922.13-- Pivot Point 4875.86-- Support 4821.48.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.26 for September-month contract.

The top five scrips with highest PCR on OI were United Phosphorus 6.00, Patni Computer Systems 4.00, United Spirits 4.00, PNB 2.19 and Kotak Bank 2.00.

Among most active underlying, SBI witnessed an addition of 6.52% of Open Interest (OI) in the September month futures contract followed by RIL witnessed an addition of 7.75% of Open Interest (OI) in the near month contract. Meanwhile Tata Steel witnessed a contraction of 5.96% of OI respectively in the September month futures.  Finally, ICICI Bank and Tata Motors witnessed an addition of 8.77% and 6.31% of Open Interest (OI) in the September month contract.