Nifty snaps four days losing streak; regains 5,500 level

The local benchmark, Nifty snapped its four day’s losing streak on Tuesday and ended the trade with a modest gain of about 20 points. The index traded in the green throughout the session and regained its crucial 5,500 mark. Earlier, the Indian equity market opened on a flat note but started moving up side in the early trade tracking supportive cues from Asian counterparts. Market regained its crucial 5,500 level in the very early trade touching its intraday high as investors remained excited ahead of Wholesale Price Index (WPI) numbers for the month of May. But, once the numbers were released the index lost most of its gains as the WPI inflation came at higher than street expectation. Inflation data for May was reported at 9.06% versus 8.66% (MoM) while, May’s primary articles inflation stood at 11.3% versus 12.05% (MoM). The index once again lost its psychological 5,500 mark and touched its intraday low in mid morning trade as investors remained worried as the rise in inflation has firmed the expectation that RBI will go for another rate hike in its upcoming policy review scheduled on June 16. Reliance Industries continued to be the major drag and ended the day’s trade with a cut of about one and a half percent, dampening the overall sentiment. In the final hour of trade market added some gains with buying in some of the key heavyweights like ICICI Bank and Larsen & Toubro. Finally, Nifty snapped the day’s trade a tad over its crucial 5,500 mark. Meanwhile, PSU oil marketing companies, including BPCL, HPCL and IOC, ended flat on comments by the oil minister S Jaipal Reddy that a panel of ministers will meet shortly to discuss a possible hike in diesel, cooking gas and kerosene prices.

On the global front, the US markets closed flat overnight with investors opting to remain on sidelines on concerns of slow global economic recovery, while Most of the Asian equity indices finished the day’s trade in the positive terrain on Tuesday after China reported better than estimated industrial output numbers. All the European counterparts too were trading firm at this point of time. Back home, broad based buying supported all sectoral indices on the NSE to settle in the positive territory with CNX Infra surging the most, ending with a gain of about a percent followed by Bank Nifty, CNX Realty and CNX IT. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 2.11% and reached 18.51, while S&P Nifty moved higher by 17.70 points to close at 5,500.50. The markets volumes remained over Rs 0.87 lakh crore while the turnover for NSE F&O segment remained lower compared to Monday at over 0.72 lakh crore.

The India VIX witnessed a contraction of 2.11% at 18.51 on Tuesday as compared to its previous close of 18.91 on Monday.  

The 50-share S&P CNX Nifty added 17.70 points or 0.32% and settled at 5,500.50.

Nifty June 2011 futures closed at 5,516.10, at a premium of 15.60 points over spot closing of 5,500.50, while Nifty July 2011 futures were at 5,531.65 at a premium of 31.15 points over spot closing. The near month June 2011 derivatives contract expires on Thursday, June 30, 2011. Nifty June futures saw addition of 3.35% or 0.78 million (mn) units, taking the total outstanding open interest (OI) to 24.13 mn units.

From the most active underlying, Tata Motors June 2011 futures closed at a premium of 6.05 points at 987.20 compared with spot closing of 981.15. The number of contracts traded was 23,057.

Bata India June 2011 futures were at a premium of 3.20 point at 558.50 compared with spot closing of 555.30. The number of contracts traded was 9,164.

SBI’s June 2011 futures were at a premium of 13.00 points at 2244.00 compared with spot closing of 2231.00. The number of contracts traded was 17,887.

Titan June 2011 futures were at a discount of 7.30 at 4552.70 compared with spot closing of 4560.00. The number of contracts traded was 8,735.

RIL June 2011 futures were at a premium of 5.70 points at 917.15 compared with spot closing of 911.45. The number of contracts traded was 18,820.

Among Nifty calls, 5500 SP from the June month expiry was the most active call with contraction of 0.37 million or 7.12%.

Among Nifty puts, 5500 SP from the June month expiry was the most active put with an addition of 0.23 million or 3.64%.

The maximum Call OI outstanding for Calls was at 5500 SP (4.85 mn) and that for Puts was at 5500 SP (6.58 mn).

The respective Support and Resistance levels are: Resistance 5519.03-- Pivot Point 5501.61-- Support 5483.08.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.29 for June -month contract.

The top five scrips with highest PCR on OI were Videocon Industries 3.33, Sintex 3.00, Bharat Forge 3.00, BEML 3.00, and TCS 1.42.

Among most active underlying, Tata Motors witnessed an addition of 7.96% of Open Interest (OI) in the June month futures contract followed by Reliance Industries which too added 10.86% of Open Interest (OI) in the near month contract. Meanwhile State Bank of India (SBI) witnessed an addition of 3.69% of OI in the June month futures.