Frail Nifty trims losses in final deals to close well above 6750

After witnessing bloodbath in the first half, domestic benchmark S&P Nifty pared most of its losses and ended the day’s trade with a marginal cut of about 20 points as recovery in IT and healthcare stocks helped the sentiments. However, global cues remained subdued as most of the Asian equity indices shut shop in the negative terrain on last trading day of the week on account of sharp fall in US markets last night. Earlier, the Indian equity market made a gap down start on the back of weak cues from global equity indices. Moreover, Nifty breached its crucial 6,750 mark in early trade as cautious investors booked profits ahead of inflation data and earning season amid a slide in global markets. Banking stocks witnessed beating after a Reserve Bank of India (RBI) panel recommended a slew of measures, including potentially changing how lending rates are set for the sector, raising worries about overall profitability. Additionally, auto shares witnessed profit taking after domestic passenger car sales declined 5.08% to 171,489 units in March as compared to 180,675 units in the year-ago month.

In today's session traders added 6900 and 6800 calls and exited 6800 puts as they were expecting an up move in Nifty. Nifty 6700 put shows maximum OI (near the strike price) where most of traders have written put options expecting Nifty to take support at this level. The top gainers from the F&O segment were Jaiprakash Power Ventures, India Cements and OFSS. The top losers were IndusInd Bank, SBI and Mahindra & Mahindra. Moreover, India VIX - the gauge of underlying volatility in the market - has risen in the last two weeks, which show that traders are buying more options contracts as insurance against declines in the market.

Most of the sectoral indices on the NSE were settled in the red, CNX IT remained the major gainer, up 1.45% followed by CNX Pharma up 1.11% and CNX Realty up by 0.12%, while CNX PSU Bank down by 1.18% followed by CNX Auto down 1.18% CNX Energy down by 1.03%, CNX Media down by 0.95%, Bank Nifty down by 0.84%, CNX Finance down by 0.84%, CNX FMCG down by 0.29% and  CNX Metal down 0.27% were the only losers on the NSE sectoral indices.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility was up by 1.62% and reached 29.1850. The 50-share CNX Nifty declined by 20.10 points or 0.30% to settle at 6,776.30.

Nifty April 2014 futures closed at 6,803.55 on Friday at a premium of 27.25 points over spot closing of 6,776.30, while Nifty May 2014 futures ended at 6,854.25 at a premium of 77.95 points over spot closing. Nifty April futures saw contraction of 0.38 million (mn) units, taking the total outstanding open interest (OI) to 16.12 mn units. The near month April 2014 derivatives contract will expire on April 24, 2014.

From the most active contracts, DLF April 2014 futures were at a premium of 1.75 points at 177.25 compared with spot closing of 175.50. The number of contracts traded was 17,738.

Reliance Capital April 2014 futures were at a premium of 2.40 points at 372.90 compared with spot closing of 370.50. The number of contracts traded was 21,690.

Tata Steel April 2014 futures traded at a premium of 2.05 points at 420.55 compared with spot closing of 418.50. The number of contracts traded was 13,661.

Reliance Industries April 2014 futures traded at a premium of 7.65 points at 958.90 compared with spot closing of 951.25. The number of contracts traded was 16,718.

ICICI Bank April 2014 futures traded at a premium of 4.85 points at 1242.85 compared with spot closing of 1238.00. The number of contracts traded was 18,889.Among Nifty calls, 6,900 SP from the April month expiry was the most active call with addition of 0.42 million open interest.

Among Nifty puts, 6,650 SP from the April month expiry was the most active put with addition of 0.49 million open interest.

The maximum OI outstanding for Calls was at 6,900 SP (4.33mn) and that for Puts was at 6,700 SP (5.91 mn).

The respective Support and Resistance levels of Nifty are: Resistance 6796.05-- Pivot Point 6769.60 - Support -- 6749.85.

The Nifty Put Call Ratio (PCR) finally stood at 1.45 for April month contract. The top five scrips with highest PCR on OI were HDFC 1.94, HDIL 1.42, Ambuja Cements 1.38, Century Textile 1.33 and PNB 1.05.

Among most active underlying, Infy witnessed addition of 0.45 million of Open Interest in the April month futures contract, followed by Adani Enterprises witnessing an addition of 0.54 million of Open Interest in the April month contract; SBI witnessed a contraction of 0.23 million of Open Interest in the April month futures. Reliance Capital witnessed a contraction of 0.70 million of Open Interest in the April month contract and Reliance Infra witnessed an addition of 0.11 million of Open Interest in the expiring April month's future contract.