Nifty extends consolidation mood for third consecutive day

A bout of volatility witnessed in the final hour of day’s trade and fifty stock index -- Nifty -- extended its consolidation mood for third consecutive day. However, market traded choppy throughout the session but, made a great come back in final hours of trade supported by strong cues from European counters. Moreover, rally in index heavyweight Reliance Industries and fast moving consumer goods shares too strengthen the sentiments. Market witnessed about 100 points recovery in last leg of trade breaching its crucial 4,780 mark but unable to hold that level and snapped the day’s trade with a marginal gains.

Earlier, the market made a choppy start on the back of continued selling by funds on fears of disappointing quarterly earnings and a weakening trend on other Asian bourses. Metal stocks also fell in the early trade as LMEX, a gauge of six metals traded on the London Metal Exchange, dropped 0.52% on January 5, 2012. Market extended its downfall and breached its crucial 4,700 mark as investors remained cautious ahead of fourth quarter’s corporate earnings. Moreover, shares of telecom companies remained under pressure on the bourses ahead of the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) hearing on the third-generation (3G) roaming case due Monday. Afterwards, the market traded in the tight band near its crucial 4,700 mark in the absence of any positive trigger. But, in the last leg of trade market made a terrific come back making a recovery of about 100 points and recaptured its crucial 4,750 mark on the back of firm European cues. Moreover, shares of companies engaged in retail business rallied on the bourses on reports that the government will issue a formal order to allow 100% foreign direct investment (FDI) in single-brand retail. Reliance Anil Dhirubhai Ambani Group (ADAG) shares jumped in late trade too aided the sentiments. Finally, market ended the day’s trade with marginal gains holding its psychological 4,750 mark.

On the global front, the US markets made a mixed closing on Thursday as investors remained concerned about the European debt crisis while, most of the Asian counters snapped the last day of the week in the negative terrain as concerns over the euro zone debt crisis overshadowed another batch of upbeat US jobs figures. Moreover, all the major European counterparts were trading in the green where major indices like CAC and DAX were trading with a gain of over half a percent at this point of time. Back home, on NSE sectoral space CNX Infra losing the most, ending with a cut of 1.21% followed by CNX PSE down by 1.00% and CNX Media down by 0.85% while, CNX Energy up 0.85% and CNX FMCG up by 0.75% remained top gainers. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 1.739% and reached 25.46.

The India VIX witnessed contraction of 1.74% at 25.46 as compared to its previous close of at 25.91 on Thursday.

The 50-share S&P CNX Nifty gained 4.15 points or 0.09% to settle at 4,754.10.

Nifty January 2012 futures closed at 4,771.95 at a premium of 17.85 points over spot closing of 4,754.10, while Nifty February 2012 futures were at 4,789.60 at a premium of 35.50 points over spot closing. The near month January 2012 derivatives contract expires on Thursday, January 25, 2012. Nifty January futures saw contraction of 0.80 million (mn) units taking the total outstanding open interest (OI) to 20.41 mn units.

From the most active contract by contract value, SBI’s January 2012 futures were at a discount of 0.65 point at 1669.35 compared with spot closing of 1670.00. The number of contracts traded was 28,610.

Tata Motors January 2012 futures were at a discount of 1.60 point at 203.15 compared with spot closing of 204.75. The number of contracts traded was 12,712.

RIL January 2012 futures were at a premium of 3.40 points at 721.55 compared with spot closing of 718.15. The number of contracts traded was 27,775.

Infosys January 2012 futures were at a premium of 21.05 point at 2850.15 compared with spot closing of 2829.10. The number of contracts traded was 13,004.

ICICI Bank January 2012 futures were at a discount of 0.50 point at 753.70 compared with spot closing of 754.20. The number of contracts traded was 23,254.

Among Nifty calls, 4800 SP from the January month expiry was the most active call with a contraction of 0.03 million or 0.84%.

Among Nifty puts, 4700 SP from the January month expiry was the most active put with an addition of 0.17 million or 3.24%.

The maximum Call OI outstanding for Calls was at 4800 SP (3.94 mn) and that for 4700 Puts was at 4700 SP (5.01 mn).

The respective Support and Resistance levels are: Resistance 4803.71-- Pivot Point 4745.28-- Support 4695.66.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.27 for January -month contract.

The top five scrips with highest PCR on OI were MRPL 9.00, Tata Chemicals 7.00, Union Bank 6.00, Lupin 4.00 and Bank of India 3.00.

Among most active underlying, SBI witnessed an addition of 0.17% of Open Interest in the January month futures contract followed by Reliance Industries which witnessed a contraction of 1.53% of Open Interest in the near month contract. Meanwhile ICICI Bank witnessed an addition of 3.22% in the January month futures. Also, Tata Steel witnessed an addition of 1.08% in Open Interest in the January month contract. Finally, DLF witnessed an addition of 6.88% of Open Interest in the near month futures contract.