Bulls back with vengeance; Nifty reclaims 4,650 mark

After five continuous days of fall, bulls held their control throughout the day’s trade on Wednesday and the Nifty ended the trade with a gain of over three percent, bolstered by bargain buying and firm global markets. Moreover, market traded with decent gains but in tight range till late noon trade although, turbulent buying in final hour trade propelled the index to end near its intraday high near its crucial 4,700 mark. Firm global stocks aided recovery in battered Indian shares. Shares of exporters and resource firms led world stocks higher as renewed optimism about the health of the global economy boosted risk appetite.

Back home, the Indian equity market made a gap up start tracking positive cues from global indices. Upbeat US and German data amidst strong demand for Spanish debt, which mainly aided investors to temporarily look past Europe’s debt woes, mainly sent the regional counterparts higher and index reclaimed its crucial 4,600 mark in early trade. Moreover, investor’s also took a heart out of reports of Moody’s lifting rupee debt rating by one notch. Global credit ratings agency Moody's Investor Service lifted India’s local currency debt rating by one notch to the lowest investment grade, in-line with the foreign currency bond ratings at Baa3 with a stable outlook. Afterwards, market traded range bound till noon trade in the absence of any major trigger. The index gained some more strength in mid noon trade following positive opening in European counterparts. But, it was the final hour of trade, where frenzied buying helped the market to surpass its crucial 4,650 level. Finally, Nifty snapped the day’s trade near its intraday high garnering gain of over three percent.

On the global front, the US markets showed a shining performance overnight while, Asian stock markets rose Wednesday, joining US and European rally on positive economic data from the United States and Germany and shaking off jitters over the death of North Korean leader Kim Jong Il. Moreover, European counterparts were trading in jubilant mood where CAC and DAX were up by over one percent at this point of time. Back home, all the sectoral indices on the NSE settled in the positive territory with Bank Nifty gaining the most, up 5.01% followed by CNX Energy up by 4.03%, CNX Services up by 3.86% and CNX Infra up by 3.01% in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, tumbled 9.82% and reached 27.53.

The India VIX witnessed contraction of 9.82% at 27.53 as compared to its previous close of at 30.53 on Tuesday.

The 50-share S&P CNX Nifty gained 148.95 points or 3.28% to settle at 4,693.15.

Nifty December 2011 futures closed at 4,722.25 at a premium of 29.10 points over spot closing of 4,693.15, while Nifty January 2011 futures were at 4,743.75 at a premium of 50.60 points over spot closing. The near month December 2011 derivatives contract expires on Thursday, December 29, 2011. Nifty December futures saw addition of 1.12 million (mn) units taking the total outstanding open interest (OI) to 20.55 mn units.

From the most active contract by contract value, SBI’s December 2011 futures were at a premium of 5.10 point at 1628.90 compared with spot closing of 1623.80. The number of contracts traded was 49,869.

ICICI Bank December 2011 futures were at a discount of 3.10 point at 700.00 compared with spot closing of 703.10. The number of contracts traded was 45,838.

L&T December 2011 futures were at a premium of 6.80 at 1012.90 compared with spot closing of 1006.10. The number of contracts traded was 27,470.

Tata Motors December 2011 futures were at a premium of 0.85 points at 178.00 compared with spot closing of 177.15. The number of contracts traded was 26,658.

Tata Steel December 2011 futures were at a premium of 1.40 point at 352.00 compared with spot closing of 350.60. The number of contracts traded was 29,120.

Among Nifty calls, 4700 SP from the December month expiry was the most active call with an addition of 1.25 million or 22.01%.

Among Nifty puts, 4600 SP from the December month expiry was the most active put with a contraction of 0.53 million or 9.78%.

The maximum Call OI outstanding for Calls was at 4700 SP (4.90 mn) and that for Puts was at 4600 SP (6.16 mn).

The respective Support and Resistance levels are: Resistance 4733.02 -- Pivot Point 4667.4833-- Support 4627.62.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.88 for December -month contract.

The top five scrips with highest PCR on OI were Patni 11.75, Voltas 7.00,Canara Bank 5.67, The Indian Hotels Company 4.33 and ABB 2.75 .

Among most active underlying, SBI witnessed an addition of 3.65% of Open Interest in the December month futures contract followed by ICICI Bank which witnessed a contraction of 1.66% of Open Interest in the near month contract. Meanwhile Tata Steel witnessed an addition of 8.66% in the December month futures. Also, L&T witnessed an addition of 12.38% of Open Interest in the December month contract. Finally, Reliance Industries witnessed an addition of 3.65% of Open Interest in the near month futures contract.