Nifty ends first day of New Year’s trade with moderate gains

The first trading session of the New Year turned out to be a merely dull day. It closed with moderate gains amid low volume due to lack of global and domestic cues. However, market traded in the red for most part of the day’s trade but selective buying in last leg of trade helped Nifty to end the session in the green with a marginal gains. Moreover, the global cues were not very supportive as the US markets snapped the year on a dismal note and some of the trading Asian indices made a mixed start giving cautious cues for the domestic markets. Overall, the undertone remains cautious amid persistent challenges confronting the domestic as well as global economy.

The Indian equity market started the New Year trade on a promising note as government’s decision to allow qualified foreign investors (QFIs) to directly invest in the Indian equity market boosted the sentiment. Moreover, auto stocks like Tata Motors and Mahindra & Mahindra (M&M) edged higher in the initial trade after reporting decent growth in December sales. Tata Motors’ total sales (including exports) in December 2011 were 82,278 vehicles, higher by 22% over December 2010 while, M&M reported a rise of 26% in its auto sales numbers, which stood at 42,761 units during December 2011. Afterwards, the index turned choppy as selling witnessed in auto, realty, fast moving consumer goods and banking stocks in the mid morning trade. Cut got deeper in early noon trade and the index touched its intraday low breaching its crucial 4,600 mark as there was some cautiousness in the market as Finance Minister Pranab Mukherjee said that the budget for 2012-13 ending March will be presented after elections scheduled in five states. Moreover, FMCG sector remained in the somber mood since beginning and turned out to be the biggest laggard as an Assocham study said that weak rupee and rising input costs may force FMCG companies to increase prices of their products in 2012, which in turn is likely to hit sales during the year by about 10-15 per cent. But, market started paring its losses and recaptured its important 4,600 level supported by bounce back in index heavyweight Reliance Industries. Finally, Nifty snapped the day’s trade near its intraday high with a marginal gain of 12 points.

On the global front, the US markets lost their way on the last trading day of the year; all the major indices were down by around half a percent mainly on European concern, while South Korea’s benchmark index ended the day flat. Moreover, all the European counterparts were trading in the green where major indices like CAC and DAX were trading with decent gains at this point of time. Back home, on the NSE, CNX FMCG losing the most, ending with a cut of over a percent followed by CNX Auto down by 1.02%, CNX Realty down by 0.60%, while CNX IT up by 1.24%, CNX Energy up by 0.99% and CNX Service up by 0.51% in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 1.54% and reached 27.53.

The India VIX witnessed addition of 1.54% at 27.53 as compared to its previous close of at 27.11 on Friday.

The 50-share S&P CNX Nifty gained 12.45 points or 0.27% to settle at 4,636.75.

Nifty January 2012 futures closed at 4,650.30 at a premium of 13.55 points over spot closing of 4,636.75, while Nifty February 2012 futures were at 4,670.00 at a premium of 33.25 points over spot closing. The near month January 2012 derivatives contract expires on Thursday, January 25, 2012. Nifty January futures saw addition of 0.93 million (mn) units taking the total outstanding open interest (OI) to 20.75 mn units.

From the most active contract by contract value, RIL January 2012 futures were at a premium of 6.00 point at 713.35 compared with spot closing of 707.35. The number of contracts traded was 28,621.

SBI’s January January 2012 futures were at a discount of 4.15 point at 1622.85 compared with spot closing of 1627.00. The number of contracts traded was 21,003.

Tata Motors January 2012 futures were at a premium of 0.20 points at 184.70 compared with spot closing of 184.50. The number of contracts traded was 9,633.

Infosys January 2012 futures were at a premium of 22.00 point at 2825.00 compared with spot closing of 2803.00. The number of contracts traded was 9,742.

Bajaj Auto January 2012 futures were at a premium of 2.00 point at 1473.00 compared with spot closing of 1471.00. The number of contracts traded was 8,784.

Among Nifty calls, 4700 SP from the January month expiry was the most active call with an addition of 0.40 million.

Among Nifty puts, 4600 SP from the January month expiry was the most active put with an addition of 0.36 million.

The maximum Call OI outstanding for Calls was at 4700 SP (3.99 mn) and that for Puts was at 4600 SP (4.03 mn).

The respective Support and Resistance levels are: Resistance 4659.11 -- Pivot Point 4623.58 -- Support 4601.21.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.10 for January -month contract.

The top five scrips with highest PCR on OI were Dish TV 3.00, Lupin 3.00, Maruti 2.16, ACC 2.09 and WELCORP 2.00.

Among most active underlying, Reliance Industries witnessed an addition of 0.63 million of Open Interest in the January month futures contract followed by SBI which witnessed an addition of 0.09 million of Open Interest in the near month contract. Meanwhile ICICI Bank witnessed an addition of 0.40 million in the January month futures. Also, DLF witnessed an addition of 1.83 million in Open Interest in the January month contract. Finally, Tata Steel witnessed an addition of 0.22 million of Open Interest in the near month futures contract