Final hour profit booking eats into Nifty’s gains

After trading superbly till mid afternoon trade Nifty surrendered most of their gains on the back of profit booking witnessed in the final hour of trade and ended the trade with a gain of just about 20 points. Earlier, the index made a strong start on the back of supportive global cues as all the Asian peers rallied in the morning trade. Afterwards, market dipped into the red for a while as some profit booking witnessed in the initial hours of trade but the benchmark regained its strength in mid morning trade supported by index heavyweights a  Reliance Industries, Bharti Airtel, TCS. Moreover, foreign direct investment (FDI) flows into India jumped by 43% to $3.12 billion in April 2011, against $2.17 billion received in April 2010 that too supported the sentiments and boosted the investors’ confidence. Market continued strong run and breached its crucial 5,300 mark in the early noon trade taking support from firm opening in European counterparts. Index heavyweight Reliance Industries ended the day’s trade with a gain of more than one and half a percent after a seven consecutive days of sell-off, providing strength to the index. But it was the final hour of trade, where the local market lost its track completely and pared most of its gains on the back of profit booking. Realty index on the NSE lost about three percent in the trade as realty majors viz DB Realty, Unitech, DLF and Orbit Corp all witnessed cut of over 3% impacted by hike of 25 basis points in key policy rates by Reserve Bank of India (RBI). Finally, Nifty managed to snap the day’s trade with a gain of about 20 points.

On the global front, the US markets made a positive start of the week and all the major indices were able to post modest gains, while all the Asian equity indices finished the day’s trade in the positive terrain on Tuesday concerns about a potential Greek debt default eased. Moreover, all the European counterparts were trading in the positive terrain where major indices like CAC, DAX and FTSE were trading with a gain of more than half a percent at this point of time. Back home, most of the sectoral indices on the NSE settled in the negative territory with CNX Realty losing the most, ending with a cut of about three percent followed by CNX Infra and Bank Nifty while, CNX IT edged higher in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 3.92% and reached 21.31, while S&P Nifty moved higher by 17.95 points to close at 5,275.85. The markets registered volumes of over Rs 1.26 lakh crore which remained on the lower side compared to Monday.

The India VIX shed 3.92% at 21.31 on Tuesday as compared to its previous close of 22.18 on Monday.  

The 50-share S&P CNX Nifty gained 17.95 points or 0.34% and settled at 5,275.85.

Nifty June 2011 futures closed at 5,276.10, at a premium of 0.25 points over spot closing of 5,275.85, while Nifty July 2011 futures were at 5,286.55 at a premium of 10.70 points over spot closing. The near month June 2011 derivatives contract expires on Thursday, June 30, 2011.

Nifty June futures saw addition of 3.71% or 0.93 million (mn) units, taking the total outstanding open interest (OI) to 26.16 mn units.

From the most active underlying, SBI’s June 2011 futures closed at a premium of 9.00 points at 2151.00 compared with spot closing of 2142.00. The number of contracts traded was 26,101.

ICICI Bank June 2011 futures were at a premium of 0.80 point at 1016.35 compared with spot closing of 1015.55. The number of contracts traded was 25,652.

Tata Motors June 2011 futures were at a premium of 4.65 points at 941.25 compared with spot closing of 936.60. The number of contracts traded was 19,786.

Titan June 2011 futures were at a discount of 75.00 at 4525.00 compared with spot closing of 4600.00. The number of contracts traded was 7,574.

RIL June 2011 futures were at a premium of 1.70 at 850.65 compared with spot closing of 848.95. The number of contracts traded was 20,023.

Among Nifty calls, 5300 SP from the June month expiry was the most active call with addition of 0.69 million or 14.70%.

Among Nifty puts, 5300 SP from the June month expiry was the most active put with addition of 0.44 million or 7.59%.

The maximum Call OI outstanding for Calls was at 5300 SP (5.42 mn) and that for Puts was at 5300 SP (6.25 mn).

The respective Support and Resistance levels are: Resistance 5313.20 -- Pivot Point 5285.10 -- Support 5247.75.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.92 for June -month contract.

The top five scrips with highest PCR on OI were Sintex 2.00, Bharat Forge 2.00, PNB 1.79, Sun Pharma 1.70 and Sun TV 1.54.

Among most active underlying, GTL witnessed an addition of 3.29% of Open Interest (OI) in the June month futures contract followed by SBI too witnessed an addition 2.40% of Open Interest (OI) in the near month contract. Meanwhile RIL witnessed a contraction of 1.48% of OI in the June month futures while ICICI Bank witnessed an addition of 10.98% of OI in the June month futures.