Nifty wipes out last session’s gains on weak global cues

Nifty wiped out all its gains gathered in the previous session and ended the choppy day of trade with a cut of over half a percent on the back of subdued global cues. Last week’s strong global rally was thrashed out on Monday as investors shifted their focus from Europe’s debt woes to the US economy moreover, the Japanese government intervened in the foreign exchange market to check the yen’s gains against the US dollar and support the nation’s exporters too dampened the sentiments. Back home, profit booking in blue chip stocks after a six percent gains last week too supported the downfall.

Indian equity markets made a flat opening and extended their losses in the early trade on weak global cues and breached its crucial 5,350 mark. Moreover, the downfall was also supported by Auto major, Maruti Suzuki India which tumbled about 4% in initial trade after dismal Q2 results. In the mid morning session, market gradually started recovering as technology stocks witnessed buying interest after Wipro reported a good set of Q2 numbers. The company’s consolidated net profit increased marginally by 1.25% at Rs 1300.9 crore for the quarter as compared to Rs 1284.90 crore for the similar quarter a period ago moreover, the Bangalore-based company forecasted third-quarter revenue of $1.50 billion to $1.53 billion from its IT services unit, which accounts for three-quarters of its total revenue, a rise of 2% to 4.1% from the second quarter. In the early noon trade, the local index continued its recovery paring almost all of its earlier losses and recaptured its crucial 5,350 level supported by banking stocks led by decent Q2 numbers reported by banks like ICICI Bank, Vijaya Bank, Bank of Baroda, UCO bank etc. But, it was the last leg of trade where market lost its control and started declining as cut in European counterparts got deeper, moreover, Software space reversed about all its gains on profit booking, too supported the downfall. Finally, Nifty snapped the day’s trade with a loss of over half a percentage point.

On the global front, the US markets made a mixed closing on Friday, the trade remained volatile and despite some good economic reports Nasdaq could not manage a close of green while, all the Asian equity indices barring KLSE Composite witnessed a choppy trade on Monday as investors shifted their focus from Europe’s debt woes to the US economy, waiting for the Federal Reserve’s monetary policy meeting and the key employment data that are scheduled to be announced later this week. Moreover, all of the European counterparts were trading in the red where major indices like CAC, DAX and FTSE were trading with a cut of 1-2 percent at this point of time. Back home, most of the sectoral indices on the NSE settled in the negative territory with CNX Metal losing the most, down 1.95% followed by CNX Energy down by 1.92% and CNX PSE down by 1.64% while CNX IT Media up by 2.00%, CNX PSU Bank up by 0.94% and CNX FMCG up by 0.74%, remained the top gainers in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 8.47% and reached 22.66.

The 50-share S&P CNX Nifty surrendered 34.10 points or 0.64% and settled at 5,326.60 .

Nifty November 2011 futures closed at 5,346.85 at a premium of 20.25 points over spot closing of 5,326.60, while Nifty December 2011 futures were at 5,371.50 at a premium of 44.90 points over spot closing. The near month November 2011 derivatives contract expires on Thursday, November 24, 2011. Nifty November futures saw addition of 1.07 million (mn) units or 3.85%, taking the total outstanding open interest (OI) to 28.86 mn units.

From the most active contract by contract value, SBI’s November 2011 futures were at a discount of 5.00 point at 1902.00 compared with spot closing of 1907.00. The number of contracts traded was 34,102.

ICICI Bank November 2011 futures were at a premium of 4.00 point at 935.00 compared with spot closing of 931.00. The number of contracts traded was 32,108.

HUL November 2011 futures were at a discount of 1.90 point at 372.50 compared with spot closing of 374.40. The number of contracts traded was 15,247.

Maruti November 2011 futures were at a discount of 6.35 point at 1119.80 compared with spot closing of 1126.15. The number of contracts traded was 12,757.

Infosys November 2011 futures were at a premium of 13.00 point at 2885.00 compared with spot closing of 2872.00. The number of contracts traded was 8,558.

Among Nifty calls, 5400 SP from the November month expiry was the most active call with an addition of 0.79 million or 17.28%

Among Nifty puts, 5300 SP from the November month expiry was the most active put with an addition of 0.49 million or 15.95%.

The maximum Call OI outstanding for Calls was at 5400 SP (5.36 mn) and that for Puts was at 5300 SP (3.56 mn).

The respective Support and Resistance levels are: Resistance 5353.03--Pivot Point 5333.81-- Support 5307.38.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.49 for November-month contract.

The top five scrips with highest PCR on OI were Dr Reddy’s Lab 2.91, Tata Chemicals 2.00, Sun TV Network 2.00 and Maruti Suzuki India 1.56.

Among most active underlying, ICICI Bank witnessed an addition of 4.06% of Open Interest (OI) in the November month futures contract followed by SBI witnessed an addition of 14.40% of Open Interest (OI) in the near month contract. Meanwhile HUL witnessed an addition of 18.94% of OI in the November month futures. Also, Reliance witnessed an addition of 2.96% of Open Interest (OI) in the November month contract.