Bullish sentiments help market to reclaim crucial 4,750 mark

Sentiments remained bullish throughout the day’s trade on Monday on the back of firm global cues and Nifty snapped the session on firm note with over a percent gains as buying activity was seen across the sectoral indices as traders took long positions after the rally last week. Globally, the sentiment remained supportive as the US markets edged higher on Friday and rallied to their third weekly gain in four session, post Congress move and positive macro data. Back home, fresh buying in capital goods, realty, IT, auto and metal stocks Nifty to recapture its psychological 4,750 mark. Markets are likely to be volatile this week as traders roll over positions in futures & options (F&O) segment on Thursday.

After a positive opening, market started extending its gains as sustained buying witnessed mostly in all the key heavyweights along with broader indices. Afterwards, the local index extended its gains and reclaimed its crucial 4,750 mark in morning trade as investors remained hopeful about a strong recovery of the US economy and expecting that the Reserve Bank of India will soon come out with some monetary easing moves following a sharp decline in food inflation. Moreover, the investors remained in cheerful mood as telecom stocks moved up after TDSAT stayed DoT 3G roaming ban order and said no coercive steps should be taken against companies until order. Idea, Bharti Airtel and Reliance Communications all surged by 2-4 percent. Market continued their strong run till mid noon trade. Last leg of trade brought some more cheer to the market and it touched its intraday high as stocks like TCS Infosys and Wipro edged higher after an increase in US November durable-goods orders. US is the biggest market for IT companies. Finally, market ended the day’s trade with a gain of over a percentage point recapturing its crucial 4,750 level.

On the global front, the US markets went into festivity mood on the final day of the last week, investors rejoiced with slew of good economic reports while, shrugging off upbeat US economic data, most of the Asian equity indices snapped the day’s trade in the red on Monday amid ongoing concerns over Europe’s fiscal woes and investor caution in the last trading week of the year. Moreover, European counterparts remained shut for the trade today. Back home, most of the sectoral indices on the NSE settled in the positive territory with CNX IT gaining the most, up 2.37% followed by CNX Realty up by 1.59% and CNX Services up by 1.58% while CNX Pharma down by 0.19% remained the lone loser in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, tumbled 2.88% and reached 26.60.

The India VIX witnessed contraction of 2.88% at 26.60 as compared to its previous close of at 27.39 on Friday.

The 50-share S&P CNX Nifty gained 65.00 points or 1.38% to settle at 4,779.00.

Nifty December 2011 futures closed at 4,783.00 at a premium of 4.00 points over spot closing of 4,779.00, while Nifty January 2011 futures were at 4,802.00 at a premium of 23.00 points over spot closing. The near month December 2011 derivatives contract expires on Thursday, December 29, 2011. Nifty December futures saw addition of 4.66% or 0.76 million (mn) units taking the total outstanding open interest (OI) to 17.10 mn units.

From the most active contract by contract value, SBI’s December 2011 futures were at a premium of 5.40 point at 1669.90 compared with spot closing of 1664.50. The number of contracts traded was 30,334.

RIL December 2011 futures were at a premium of 2.75 point at 762.20 compared with spot closing of 759.45. The number of contracts traded was 20,921.

ICICI Bank December 2011 futures were at a premium of 1.50 point at 728.50 compared with spot closing of 727.00. The number of contracts traded was 18,201.

SBI’s January 2011 futures were at a discount of 10.10 points at 1654.40 compared with spot closing of 1664.50. The number of contracts traded was 15,731.

L&T December 2011 futures were at a premium of 3.85 point at 1027.35 compared with spot closing of 1023.50. The number of contracts traded was 11,675.

Among Nifty calls, 4800 SP from the December month expiry was the most active call with an addition of 0.92 million or 15.41%.

Among Nifty puts, 4700 SP from the December month expiry was the most active put with an addition of 1.51 million or 28.26%.

The maximum Call OI outstanding for Calls was at 4800 SP (6.91 mn) and that for Puts was at 4700 SP (6.86 mn).

The respective Support and Resistance levels are: Resistance 4804.78 -- Pivot Point 4761.46 -- Support 4735.68.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.94 for December -month contract.

The top five scrips with highest PCR on OI were Patni 11.75, GE Ship 10.20, Rolta 5.00, CESC 4.20, Godrej Industries 4.17 and Indian Hotel 3.25.

Among most active underlying, SBI witnessed a contraction of 0.43 million of Open Interest in the December month futures contract followed by Reliance Industries which witnessed a contraction of 0.21 million of Open Interest in the near month contract. Meanwhile ICICI Bank witnessed an addition of 0.57 million in the December month futures. Also, Tata Steel witnessed an addition of 0.34 million in Open Interest in the December month contract. Finally, L&T witnessed a contraction of 0.05 million of Open Interest in the near month futures contract.