The market opened weak and sustained selling pressure saw the benchmark indices, the Nifty and Sensex, lose their crucial support levels of 5,150 and 17,300, respectively. The spot Nifty closed at 5,094 while January futures closed at almost 10 points discount on profit-taking and short build-up.
Put and call options data suggest that the 5300 call continues to hold the maximum open interest (8.18 million shares) while the 5,200 call has added significantly high open interest in the last couple of days. The means the Nifty has resistance at 5,300 and 5,200, which was a strong support, is turning into a strong resistance level. The 5,000 put hold the highest open interest (6.48 million shares), indicating strong support base for the index. The India Volatility Index (IVX) rose 5.43 per cent to 23.20 on account of increase in premium for put options, indicating fresh correction.
Technically, the market has been trading in choppy waters due to formation of a Doji pattern and narrow trading range in the January series. The Nifty slipped below 5,180 and closed at 5,091, indicating a downward breakout
Heavy selling in opening trades saw the Nifty break the psychological 5,000-mark, but regain it at close on good quarterly numbers from market heavyweights
The Sensex opened in the red on weak cues from Asian markets. The index slipped to a low of 16,608 - falling below the 17K mark after 19 trading sessions. Strong quarterly numbers from Reliance and ITC lifted market sentiment and the index recovered to touch a high of 17,000 - up 392 points from the day's low. However, the index eventually ended at 16,860 - down 191 points (1%).
The NSE Nifty, which, broke the psychological the 5,000-mark and touched a low of 4,955, recovered partially and ended with a loss of 58 points (1%) to 5,036.
The BSE FMCG index, led by heavyweight ITC, bucked overall trend and jumped 1.5% to 2,772. ITC added 2% to Rs 249 following a 27% rise in Q3 net at Rs 1,144 crore.
However, Q3 results helped some stocks to gain in an otherwise volatile market. BHEL gained 3.2% at Rs 2,373 on a 35% jump in the third quarter on FY10.
Market heavyweight, Reliance ended flat at Rs 1,053. Earlier in the day, the company announced a 16% increase in net in the quarter ended December 2009. The net profit stood at Rs 4,008 crore as compared to Rs 3,462 crore in the year ago period.
SpiceJet, Jubilant Organosys and Visa Steel gained on turnaround results in Q3.
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