Euro-zone concern drags Nifty below its crucial 5,400 level

The fifty stock index -- Nifty -- witnessed massacre on Monday tracking the other global markets on Europe’s debt crisis after Greece’s credit rating was downgraded to junk by Fitch Rating and Standard & Poor’s said that Italy’s rating was at risk, deepening concern over Euro zone’s sovereign debt crisis. However, local market traded in the negative terrain throughout the day and snapped the day’s trade below its crucial 5,400 mark with a cut of about 100 points. The Indian equity market witnessed blood bath in the early trade tracking weak cues from global indices. The trade stayed range bound till late morning trade and investors remained cautious after Finance Minister Pranab Mukherjee’s comment that inflationary pressures may continue on account of high global commodity prices. The nervous opening across European counterparts intensified selling which dragged the benchmark below its crucial 5,400 mark and market touched its nine week lows in early noon trade. Moreover, disappointing results from BHEL too weighed the sentiments and the stock closed with a huge cut of over six and a half percent. Afterwards, market traded in the tight range till the end and snapped the day’s trade below its 5,400 mark with a cut of about two percent. However, Sanghvi Forging and Engineering, the new listing snapped a decent gain of over 30 percent.

On the global front, the US markets declined on Friday dragged down by retail stocks. All the Asian equity indices finished the day's trade in negative terrain on Monday. Moreover, European counterparts too remained gloomy at this point of time and major indices like CAC, DAX and FTSE 100 were trading with a cut of 1.5-2% on concerns over lingering Euro-zone debt crisis. Back home, on the sectoral front, all the indices on NSE were completely hammered, CNX Realty remained the major laggard, losing 2.83% followed by Bank Nifty down 2.77%, CNX Infra dropped 2.55% and CNX IT was down by 0.73%. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 8.17% and reached 21.04, while S&P Nifty closed at 5,386.55 losing 99.80 points or 1.82%.

The India VIX rose by 8.17% at 21.04 on Monday as compared to its previous close of 19.45 on Friday.  

The 50-share S&P CNX Nifty declined 99.80 points or 1.82% settled at 5,386.55.

Nifty May 2011 futures closed at 5,382.00, at a discount of 4.55 points over spot closing of 5,386.55, while Nifty June 2011 futures were at 5,386.10 at a discount of 0.45 points over spot closing. The near month May 2011 derivatives contract expires on Thursday, May 26, 2011. Nifty May futures saw addition of 11.76% or 2.88 million (mn) units, taking the total outstanding open interest (OI) to 27.44 mn units.

From the most active underlying, BHEL May 2011 futures closed at a discount of 0.95 points at 1919.15 compared with spot closing of 1920.10. The number of contracts traded was 39,645.

SBI’s May 2011 futures were at a premium of 8.00 point at 2249.00 compared with spot closing of 2241.00. The number of contracts traded was 27,440.

Tata Steel May 2011 futures were at a discount of 0.30 points at 558.00 compared with spot closing of 558.30. The number of contracts traded was 24,156.

Tata Motors May 2011 futures were at a premium of 4.70 points at 1129.95 compared with spot closing of 1125.25. The number of contracts traded was 18,475.

ICICI Bank May 2011 futures were at a premium of 0.70 points at 1006.10 compared with spot closing of 1005.40. The number of contracts traded was 17,585.

For Nifty calls, 5400 strike price (SP) from the May series was the most active call with a contraction of 1.17 million or 14.58%.

Among Nifty puts, 5400 SP from the May month expiry was the most active put with an addition of 0.76 million or 9.56%.

The maximum Call OI outstanding was at 5500 SP (6.85 mn) and that for Puts at 5400 SP (8.72 mn).

The respective Support and Resistance levels are: Resistance 5525.01-- Pivot Point 5478.88-- Support 5440.21.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.74 for May-month contract.

The top five scrips with highest PCR on OI were BRFL -1.64, Ranbaxy -1.45, Grasim -1.38, Hero Honda -1.36.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.63 for May-month contracts.

The top five scrips with highest PCR on OI were BRFL 2.56, Mphasis 1.67, Ranbaxy 1.46, Grasim 1.45 and Hero Honda 1.34.