Nifty continues its bearish mood for third consecutive session

Nifty continued its downfall for third day in a row and snapped the session with a marginal cut of about 20 points after a highly volatile trade as investors remained on the safer side on worries over slow-down in economic growth. Earlier, market made a positive start tracking firm Asian counterparts but, benchmarks reversed its direction soon after initial gains as investors’ sentiments turned bearish on concerns that possible hike in diesel prices would lead raise inflation and ultimately lead to another interest rate hike by the Reserve Bank of India (RBI). Afterwards, the benchmark continued its trade near neutral line till late morning session due to lack of buying conviction among investors on concerns of inflationary pressure. In the early afternoon trade, the index witnessed a sharp fall and touched its intraday low nearing to crucial 5,400 mark as sustained selling seen in index heavyweight Reliance Industries (RIL) which extended its two-day fall while State Bank of India too extended its previous session decline triggered by poor earnings. But, Nifty found strong support near 5,400 mark and again started climbing up taking positive cues from strong Asian and European counterparts while, strong result from Bajaj Auto, HSIL and Orchid Chemicals too supported the upmove and market gained its positive terrain again. In the final hour of trade, market once again lost its track and slipped into the negative zone triggered by slump in the Oil & Gas space. Meanwhile, Mphasis, ended with a cut of about five and a half percent on bad HP outlook for Q3 and Q4 moreover, PSU oil marketing companies viz., BPCL, HPCL and IOC all ended the trade with a cut in a range of 3-5 percent in the trade after a positive start. Finally, Nifty ended a volatile day of trade in the red.

On the global front, the US markets continued their decline on getting weak economic reports and disappointing earnings number by the world’s largest technology company HP, while Asian stock rallied on Wednesday. Moreover, European counterparts too were trading on the higher note where major indices, DAX, CAC and FTSE were trading with a gain in a range of 0.50-1 percent in the trade at this point of time. Back home, on the sectoral front on the NSE, CNX Realty was the major laggard, losing 1.11% followed by Bank Nifty down 0.65% and CNX Infra dipped 0.14% while, CNX IT rose 0.31%. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 1.52% and reached 20.71, while S&P Nifty closed at 5,420.60 losing 18.35 points or 0.34%. The markets volumes remained over Rs 1.33 lakh crore while the turnover for NSE F&O segment remained lower compared to Tuesday at over 1.20 lakh crore.

The India VIX was down by 1.52% to 20.71 on Wednesday compared to its previous close of 21.03 on Tuesday.  

The 50-share S&P CNX Nifty finally settled at 5,420.60 after losing 18.35 points or 0.34%.

Nifty May 2011 futures closed at 5,427.00, at a premium of 6.40 points over spot closing of 5,420.60, while Nifty June 2011 futures were at 5,439.00 at a premium of 18.40 points over spot closing. The near month May 2011 derivatives contract expires on Thursday, May 26, 2011.

Nifty May futures saw addition of 1.96% or 0.51 million (mn) units, taking the total outstanding open interest (OI) to 26.65 mn units.

From the most active underlying, SBI’s May 2011 futures closed at a discount of 15.95 points at 2337.05 compared with spot closing of 2353.00. The number of contracts traded was 58,836.

Tata Motors May 2011 futures were at a premium of 1.80 point at 1149.95 compared with spot closing of 1148.15. The number of contracts traded was 22,470.

Bajaj Auto May 2011 futures were at a premium of 4.60 points at 1289.00 compared with spot closing of 1284.40. The number of contracts traded was 17,667.

Infosys May 2011 futures were at a discount of 15.10 points at 2830.00 compared with spot closing of 2845.10. The number of contracts traded was 14,330.

ICICI Bank May 2011 futures were at a premium of 3.70 points at 1036.00 compared with spot closing of 1032.30. The number of contracts traded was 18,099.

For Nifty calls, 5500 strike price (SP) from the May series was the most active call with an addition of 0.99 mn or 13.71%.

Among Nifty puts, 5400 SP from the May month expiry was the most active put with an addition of 0.62 mn or 8.21%.

The maximum Call OI outstanding was at 5500 SP (8.27) and that for Puts at 5400 SP (8.25).

The respective Support and Resistance levels are: Resistance 5453.65 -- Pivot Point 5427.45 -- Support 5394.40.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.65 for May-month contracts.

The top five scrips with highest PCR on OI were BRFL 2.33, Grasim 1.47, Ranbaxy 1.45, Hero Honda 1.43, and Tata Power 1.29.

Among most active underlying SBI witnessed an addition of 11.84% in the May month futures contract, followed by RIL which saw an addition of 5.50% of OI in the near month contract. Tata Motors witnessed an addition of 3.04% in this month futures followed by Bajaj Auto which witnessed an addition of 22.34% in the May month futures contract.