Bulls back in command; Nifty ends near 4,850 mark

After a four straight days of consolidation, bulls hold their control throughout the day’s trade on Tuesday and Nifty ended remarkable day of trade with over two percent of gains snapping the session near its crucial 4,850 level as sentiments remained strong amid firm global cues. All the Asian equity indices rallied on Tuesday with major indices garnered gain of over a percentage point on signs that the US economy may be strengthening. Chinese shares rose after weaker-than-expected China trade data boosted hopes that Beijing would relax monetary policy to contain a slowdown in the world's second-largest economy. On the domestic front, Moody’s upgraded India’s short-term foreign currency rating from speculative to investment grade, a development which will help domestic companies to raise funds from overseas markets at better rates.

Buoyed by a robust Asian markets, the Indian key benchmark made a gap-up start and the index recaptured its 4,800 mark supported by banking stocks, which rose on expectations that the Reserve Bank of India (RBI) will start cutting interest rates in the coming months to prop up slowing economy. Afterwards, market extended its jubilant run as power stocks aided the sentiments as power sector remained euphoric ahead of the meeting of an empowered group of ministers (EGoM) later this month. Gas-based power projects with a generation capacity of about 4,000 Mw are ready to commence operations by March 31 and are awaiting allocation by the EGoM. Benchmarks gained further in mid afternoon trade as European counters made a firm start. The investors’ mood was also cheered by bounce back in the rupee, which surged to its four week high after the volatility lessened in the money market. Index heavyweight Reliance industries too supported the rally, gaining about four percent in the trade. Meanwhile, Indusind bank reported a decent Q3 number too boosted the investors’ sentiments. Moreover, Sugar stocks extended their recent gains triggered by report that the government may allow further export of sugar in the next few days. In the final hour of trade, market recaptured its crucial 4,850 mark for a while but snapped the session a tad below that level.

On the global front, the US markets edged higher overnight as investors bet on the corporate earnings season while, sentiments remained bullish in the Asian region and all the equity indices rallied on Tuesday. Moreover, European counterparts were trading in jubilant mood where CAC, DAX and FTSE were up by 1-2 percent at this point of time. Back home, all the sectoral indices on the NSE settled in the positive territory with CNX Realty gaining the most, up 4.99% followed by CNX PSU Bank up by 3.81%, CNX Metal up by 3.17% and Bank Nifty up by 2.99% in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, tumbled 6.54% and reached 24.00.

The India VIX witnessed contraction of 6.54% at 24.00 as compared to its previous close of at 25.68 on Monday.

The 50-share S&P CNX Nifty gained 106.75 points or 2.25% to settle at 4,849.55.

Nifty January 2012 futures closed at 4,870.30 at a premium of 20.75 points over spot closing of 4,849.55, while Nifty February 2012 futures were at 4,889.00 at a premium of 39.45 points over spot closing. The near month January 2012 derivatives contract expires on Thursday, January 25, 2012. Nifty January futures saw addition of 1.43 million (mn) units taking the total outstanding open interest (OI) to 21.39 mn units.

From the most active contract by contract value, SBI’s January 2012 futures were at a premium of 0.30 point at 1705.30 compared with spot closing of 1705.00. The number of contracts traded was 36,586.

DLF January 2012 futures were at a premium of 0.35 point at 185.55 compared with spot closing of 185.20. The number of contracts traded was 30,871.

Tata Motors January 2012 futures were at a premium of 0.45 points at 206.15 compared with spot closing of 205.70. The number of contracts traded was 12,744.

RIL January 2012 futures were at a premium of 6.15 point at 740.50 compared with spot closing of 734.35. The number of contracts traded was 25,504.

ICICI Bank January 2012 futures were at a premium of 2.50 point at 776.90 compared with spot closing of 774.40. The number of contracts traded was 23,327.

Among Nifty calls, 4900 SP from the January month expiry was the most active call with contraction of 0.01 million.

Among Nifty puts, 4800 SP from the January month expiry was the most active put with an addition of 2.23 million.

The maximum Call OI outstanding for Calls was at 4900 SP (4.96 mn) and that for Puts was at 4800 SP (4.38 mn).

The respective Support and Resistance levels are: Resistance 4880.88 -- Pivot Point 4824.56 -- Support 4793.23.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.37 for January -month contract.

The top five scrips with highest PCR on OI were Union Bank 7.00, MRPL 4.50, Lupin 4.00, Bank of India 3.00 and Gitanjali 2.89.

Among most active underlying, SBI witnessed contraction of 0.17 million of Open Interest in the January month futures contract followed by Reliance Industries which witnessed contraction of 0.19 million of Open Interest in the near month contract. Meanwhile DLF witnessed an addition of 1.32 million in the January month futures. Also, ICICI Bank witnessed an addition of 0.33 million in Open Interest in the January month contract. Finally, Tata Steel witnessed an addition of 0.14 million of Open Interest in the near month futures contract.