Nifty snaps September F&O series with a massive gain of over 6%

S&P CNX Nifty finished the September F&O series with a massive gain of over 6%, though for the day, Nifty closed with a quarter percent of loss surrendering below 5,650 mark, as selling crept in the last hour of trade. The index started in green as the undertone was supported by steady inflow of overseas portfolio capital. However, the trade remained volatility throughout the session and caution sneaked in the last leg of trade where it drifted into red. The global cues too remained unsupportive as protests in Spain and Greece over euro zone austerity measures raised fresh concerns over Europe's ability to get its debt crisis under control. Besides, Asian markets ended mostly in red though decline in industrial profits in Chinese market has again raised speculation that its central bank will take measures to support economic growth.

Initially, market started the trade on a flat note and remained on the sidelines in early deals. The sentiments got some support after India made it mandatory for all foreigners to furnish a tax residency certificate of their home country to claim benefits under the double taxation avoidance agreement. The optimism started building up in the market in the late morning session with Benchmarks adding some gains after some sense of comfort was drawn by the investors pursuant to United Progressive Alliance (UPA) coordination committee extending its full support to Prime Minister Dr Manmohan Singh for taking bold initiatives to improve the economic situation in the country. However, investors started turning cautious as ratings agency Moody’s Investors Service anticipated that India’s fiscal deficit will exceed 5.1% despite the recent moves by the government to rein in deficit and has said that the recent reform measures won't improve India's credit profile and only serve as sentiment boosters, as the country is still constrained by its fiscal deficit. Finally the nervousness among traders ahead of the announcement of government’s borrowing calendar for the second-half of the fiscal year, a key indicator of its fiscal discipline, mainly led to the downturn of the bourses. Selling also got intensified in the final hours after the Supreme Court, delivering its opinion on the Presidential Reference moved by the Centre said that auction order must be restricted for the telecom spectrum only and opined that auction cannot be the only method for allocating natural resources.

Meanwhile, most of the sectoral indices on the NSE settled in the red, CNX Energy remained the major loser, down 1.39% followed by CNX PSE down 1.14% and CNX IT down by 1.00% while CNX Media and CNX FMCG rose 2.44% and 1.60% remained the top gainers in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 0.35% and reached 16.91.

The India VIX witnessed contraction of 0.35% at 16.91 as compared to its previous close of at 16.97 on Wednesday.

The 50-share S&P CNX Nifty lost 13.95 points or 0.25% to settle at 5,649.50.

Nifty October 2012 futures closed at 5684.30 on Thursday at a premium of 34.80 points over spot closing of 5,649.50, while Nifty November 2012 futures were at 5710.20 at a premium of 60.70 points over spot closing. Nifty October futures saw an addition of 5.45 million (mn) units taking the total outstanding open interest (OI) to 21.82 mn units. The near month October 2012 derivatives contract will expire on October 25, 2012.

From the most active contracts, Tata Motors October 2012 futures were trading at a premium of 1.15 at 261.55 compared with spot closing of 260.40. The number of contracts traded was 16,209.

Among Nifty calls, 5700 SP from the October month expiry was the most active call with an addition of 1.07 million open interest.

Among Nifty puts, 5300 SP from the October month expiry was the most active put with an addition of 2.33 million open interest.

The maximum OI outstanding for Calls was at 5700 SP (4.49 mn) and that for Puts was at 5300 SP (5.07 mn).

The respective Support and Resistance levels are: Resistance 5682.23 -- Pivot Point 5660.96 --Support 5628.23.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.09 for October -month contract.

The top five scrips with highest PCR on OI were PNB 1.78, Central Bank 1.50, ITC 1.43, Asian Paint 1.36, and Wipro 1.04.

Among the most active underlying, IFCI witnessed an addition of 11.22 million of Open Interest in the October month futures contract followed by JP Associates, which witnessed an addition of 8.50 million of Open Interest in the near month contract. Meanwhile, RCOM witnessed an addition of 7.92 million in the October month futures. Also, Shree Renuka Sugars witnessed an addition of 8.88 million in Open Interest in the October month contract. Finally, Tata Motors witnessed an addition of 6.95 million of Open Interest in the near month futures contract.