Nifty ends below 5,450 mark ahead of the RBI’s monetary policy meeting

The fifty stock index -- Nifty -- resumed its southbound journey after a day of halt and ended the dismal day of trade with a cut of about a percent on the back of weak global cues, while on domestic front the rate sensitive sectors got hammered as investors remained cautious ahead of RBI’s mid quarter policy review on June 16. Earlier, the Indian equity market made a negative start as investors started booking profits made in previous session amid weak cues from Asian counterparts. The index continued to trade in tight band till late noon session as global cues too remained unsupportive. In the early noon trade, market started moving downside and breached its crucial 5,450 mark, as rate sensitive counters like real estate and banking started witnessing selling pressure ahead of the central bank’s mid-quarter monetary policy meeting on Thursday. Investors are speculating that the RBI is likely to hike its policy rates by 25 basis points (bps) which will be its 10th hike in just 16 months. Moreover, weak opening in European counterparts too weighed on the traders’ sentiments. In the final hour of trade, market got some support near its 5,500 level and declined took a halt. Finally, the Nifty ended the trade, near its intraday low a tad below its crucial 5,450 mark with a cut of over 50 points. Moreover, the advance tax in Q4 FY-11 paid by the leading corporate showed that India Inc. is not optimistic. The major disappointment came from the Tata group companies, majority of whom have paid lower advance tax for the first quarter compared to same quarter of the last year.

On the global front, The US markets made a smart recovery and surged on Tuesday on report that retail sales fell less than expected while, Most of the Asian equity indices finished the day’s trade in the positive terrain on Wednesday.  However, all the European counterparts were trading in the negative terrain at this point of time as worries over Greece’s new aid deal weighed on sentiment‎ in the region. Back home, on the sectoral front, all the indices on NSE were hammered, Bank Nifty remained the major laggard, losing 1.64% followed by CNX IT down 1.14%, CNX Realty 0.12% and CNX Infra by 0.90%. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 3.40% and reached 19.14, while S&P Nifty closed at 5,447.50 losing 53.00 points or 0.96%. The markets volumes remained over Rs 0.96 lakh crore while the turnover for NSE F&O segment remained higher compared to Tuesday at over 0.83 lakh crore.

The India VIX witnessed a gain of 3.40% at 19.14 on Wednesday as compared to its previous close of 18.51 on Tuesday. The 50-share S&P CNX Nifty shed 53.00 points or 0.96% and settled at 5,447.50.

Nifty June 2011 futures closed at 5,452.65, at a premium of 5.15 points over spot closing of 5,447.50, while Nifty July 2011 futures were at 5,469.90 at a premium of 22.40 points over spot closing. The near month June 2011 derivatives contract expires on Thursday, June 30, 2011.

Nifty June futures saw addition of 7.70% or 1.77 million (mn) units, taking the total outstanding open interest (OI) to 24.78 mn units.

From the most active underlying, SBI’s June 2011 futures closed at a premium of 11.00 points at 2192.00 compared with spot closing of 2181.00. The number of contracts traded was 23,249.

Tata Motors June 2011 futures were at a premium of 2.40 point at 996.00 compared with spot closing of 993.60. The number of contracts traded was 24,252.

RIL June 2011 futures were at a premium of 4.85 points at 905.10 compared with spot closing of 900.25. The number of contracts traded was 21,849.

Titan June 2011 futures were at a discount of 3.95 at 4471.05 compared with spot closing of 4475.00. The number of contracts traded was 6,317.

ICICI Bank June 2011 futures were at a premium of 4.45 points at 1039.50 compared with spot closing of 1035.05. The number of contracts traded was 12,535. 

Among Nifty calls, 5500 SP from the June month expiry was the most active call with addition of 1.68 million or 35.44%.

Among Nifty puts, 5500 SP from the June month expiry was the most active put with contraction of 1.52 million or 23.58%.

The maximum Call OI outstanding for Calls was at 5500 SP (6.43 mn) and that for Puts was at 5500 SP (4.95 mn).

The respective Support and Resistance levels are: Resistance 5484.91-- Pivot Point 5461.93-- Support 5424.51.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.17 for June -month contract.

The top five scrips with highest PCR on OI were Videocon Industries 3.33, Sintex 3.00, Bharat Forge 3.00, Areva T&D 1.33, and Sun TV 1.19.

Among most active underlying, SBI witnessed an addition of 6.71% of Open Interest (OI) in the June month futures contract followed by Tata Motors which too added 1.48% of Open Interest (OI) in the near month contract. Meanwhile RIL witnessed an addition of 5.63% of OI in the June month futures.