Nifty witnesses consolidation ahead of Q3 numbers, IIP data

After a massive triple digit rally in yesterday’s trade, the domestic index Nifty witnessed consolidation on Wednesday as investors turned cautious ahead of the third quarter earnings which are expected to remain muted and November index of industrial production (IIP) data. The markets traded in a narrow range for most part of the trading session. On the global front, the European markets were completely lackluster in the early trade after pricing in all positives in yesterday’s trade. However, Nifty managed to hold its crucial 4,850 level, led by index heavyweights Reliance Industries, banks and metals stocks.

The domestic index made a flat opening following mixed Asian cues. Afterwards, market started moving northwards and showed some sign of strength in the mid morning session as sentiments were boosted by retail stocks after the notification of single brand retail that got approval by DIPP (Department Of Industrial Policy & Promotion). 100 percent FDI has been allowed in single brand retail via government route and atleast 30 percent will be mandatory sourcing from SME’s. Stocks like Koutons, Pantaloon, shoppers stop gained 4-8 percent for the day. Moreover, aviation stocks gained momentum on hopes that FDI proposal may get passed soon as Home Ministry said all ministries were supportive of Aviation FDI proposal. The rise in rupee too supported the sentiments of the market, which traded at its fresh one month high. In the early noon trade, market touched its intraday high as metal stocks continued their jubilant run especially after China's trade data and Alcoa’s positive outlook for aluminum demand. But, the index pared most of its gains in mid noon trade following lackluster opening in European counters. Moreover, technology stocks lost the ground ahead of big day - Infosys is going to declare its third quarter numbers tomorrow. Major IT companies like TCS, Wipro, and HCL Technology too lost between 0.50-2.50 percent. Finally, Nifty snapped the day’s trade with marginal gain of 0.24 percentage point.

On the global front, the US markets edged higher overnight while, most of the Asian markets ended higher on Wednesday, with resource and financial-sector stocks underpinning the gains after a strong performance for global equities and commodities a day earlier. Moreover, the European counterparts were trading mixed at this point of time. Back home, most of the sectoral indices on the NSE were settled in the green, CNX Realty remained the major gainer, up 4.61% followed by CNX Metal up 2.31% and Bank Nifty up by 1.20% while CNX IT and CNX FMCG declined 1.30% and 0.55% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 2.25% and reached 24.54.

The India VIX witnessed addition of 2.25% at 24.54 as compared to its previous close of at 24.00 on Tuesday.

The 50-share S&P CNX Nifty gained 11.40 points or 0.24% to settle at 4,860.95.

Nifty January 2012 futures closed at 4,872.35 at a premium of 11.40 points over spot closing of 4,860.95, while Nifty February 2012 futures were at 4,891.90 at a premium of 30.95 points over spot closing. The near month January 2012 derivatives contract expires on Thursday, January 25, 2012. Nifty January futures saw addition of 0.01 million (mn) units taking the total outstanding open interest (OI) to 21.40 mn units.

From the most active contract by contract value, Infosys January 2012 futures were at a premium of 24.00 point at 2843.00 compared with spot closing of 2819.00. The number of contracts traded was 21,905.

SBI’s January 2012 futures were at a premium of 7.70 point at 1730.70 compared with spot closing of 1723.00. The number of contracts traded was 32,058.

DLF January 2012 futures were at a premium of 1.65 points at 191.95 compared with spot closing of 190.30. The number of contracts traded was 31,026.

Tata Motors January 2012 futures were at a premium of 0.65 point at 205.15 compared with spot closing of 204.50. The number of contracts traded was 11,686.

Axis Bank January 2012 futures were at a discount of 13.90 point at 929.60 compared with spot closing of 943.50. The number of contracts traded was 19,867.

Among Nifty calls, 4900 SP from the January month expiry was the most active call with an addition of 0.76 million.

Among Nifty puts, 4800 SP from the January month expiry was the most active put with an addition of 0.53 million.

The maximum Call OI outstanding for Calls was at 4900 SP (5.72 mn) and that for Puts was at 4800 SP (4.92 mn).

The respective Support and Resistance levels are: Resistance 4878.23 -- Pivot Point 4859.91 -- Support 4842.63.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.36 for January -month contract.

The top five scrips with highest PCR on OI were Union Bank 7.00, Lupin 4.00, Dabur 3.60, CESC 3.25 and Bank of India 3.00.

Among most active underlying, Infosys witnessed addition of 0.24 million of Open Interest in the January month futures contract followed by SBI which witnessed contraction of 0.12 million of Open Interest in the near month contract. Meanwhile DLF witnessed an addition of 1.30 million in the January month futures. Also, Reliance Industries witnessed contraction of 0.75 million in Open Interest in the January month contract. Finally, ICICI Bank witnessed a contraction of 0.26 million of Open Interest in the near month futures contract.