Nifty closes near day’s high; recaptures 7,600 mark

After witnessing drubbing in previous two sessions, bulls retaliate back ending the erratic day of trade in a great fashion, garnering gains of around one and a half percent as investors kept themselves busy in buying beaten down fundamentally strong stocks. Global cues too remained supportive as Asian Markets settled mostly in the green terrain, though the double-whammy of a deepening conflict in Iraq and a gas dispute between Ukraine and Russia kept the gains in check. While, recovery in European counters too supported the sentiments with CAC, DAX and FTSE trading in the positive terrain in early deals, buoyed by hopes for mergers and acquisitions among healthcare companies and rebounding from losses caused by geopolitical concerns.

Earlier, the domestic index made a choppy start and traded listlessly for most part of the day as investors remained concerned over the turmoil in Iraq. Report that foreign portfolio investors (FPIs) sold shares worth a net Rs 194.10 crore on June 16, 2014, too weighed down sentiments. However, bulls woke up late as the index surged and market-participants scrambled to cover their pending short positions, with some of them also initiating fresh bets of select-blue chip stocks available at attractive valuations after the recent drubbing. Some solace also came after Reserve Bank of India’s (RBI) Governor Raghuram Rajan reassured markets that India is better prepared to deal with external shocks than last year, when warnings by the U.S. Federal Reserve that it would scale back its monetary stimulus hit the rupee. Meanwhile, Finance Minister Arun Jaitley has attributed the rise in inflation partly to withholding of food stocks by traders and has said the Centre is committed to ease supply side bottlenecks and has also asked states to take firm measures against hoarders to check speculation. Finally, Nifty ended unpredictable day of trade near its day’s high with a decent gain of 98 points.

Most of the sectoral indices on the NSE were settled in the green, CNX PSU Bank up by 3.05%, CNX Energy up by 2.51%, Bank Nifty up by 2.28%, CNX Finance up by 1.66% and CNX Metal up by 1.48% remained the top gainers in the trade, while CNX FMCG down by 0.29% was the lone loser in the trade.

Meanwhile, the top gainers from the F&O Securities were ONGC, Axis Bank, Asian Paints, PNB and SSLT. The top losers were M&M, MCDOWELL-N, Hero MotoCorp, HUL and Dr Reddys. Meanwhile, India VIX - the gauge of underlying volatility in the market - has declined in today’s session, which indicates that traders have slowdown buying options contracts.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 1.59% to 17.6950. The 50-share CNX Nifty surged by 98.15 points or 1.30% to settle at 7,631.70. Nifty June 2014 futures closed at 7657.40 on Tuesday at a premium of 25.70 points over spot closing of 7,631.70, while Nifty July 2014 futures ended at 7693.75 at a premium of 62.05 points over spot closing. Nifty June futures saw contraction of 0.15 million (mn) units, taking the total outstanding open interest (OI) to 14.80 mn units. The near month June 2014 derivatives contract will expire on June 26, 2014.

From the most active contracts, HDFC Bank June 2014 futures traded at a premium of 2.65 points at 851.15 compared with spot closing of 848.50. The number of contracts traded was 19,576.

ONGC June 2014 futures were at a premium of 1.40 points at 447.20 compared with spot closing of 445.80. The number of contracts traded was 16,694.

Reliance Industries June 2014 futures were at a premium of 2.55 points at 1095.85 compared with spot closing of 1093.30. The number of contracts traded was 31,279.

Tata Steel June 2014 futures were at a premium of 1.30 points at 534.80 compared with spot closing of 533.50. The number of contracts traded was 21,710.

ICICI Bank June 2014 futures traded at a premium of 5.20 points at 1456.20 compared with spot closing of 1451.00. The number of contracts traded was 25,320.

Among Nifty calls, 7,600 SP from the June month expiry was the most active call with an contraction of 0.59 million open interest. Among Nifty puts, 7,500 SP from the  June month expiry was the most active put with addition of 0.84 million open interest. The maximum OI outstanding for Calls was at 7700 SP (5.59 mn) and that for Puts was at 7,500 SP (5.89 mn). 

The respective Support and Resistance levels of Nifty are: Resistance 7676.45 --- Pivot Point 7592.85 --- Support --- 7548.10.

The Nifty Put Call Ratio (PCR) finally stood at 1.05 for June month contract. The top five scrips with highest PCR on OI were Mcleod Russel India (1.49), TCS (1.09), Aurobindo Pharma (1.09), Maruti Suzuki (0.92) and BPCL (0.91).

Among most active underlying, State Bank of India witnessed an addition of 0.16 million of Open Interest in the June month futures contract, followed by Tata Steel witnessing an addition of 0.26 million of Open Interest in the June  month contract; while Reliance Industries witnessed an addition of 0.51 million of Open Interest in the June month futures contract, Reliance Capital witnessed an addition 1.04 million of Open Interest in the June month contract and Axis Bank witnessed contraction of 0.04 million  of Open Interest in the June month's future contract.