Nifty manages a close in green for second straight session

Nifty ended in green for second straight session as final hour of trade pulled index above the neutral line. Buying was seen in fundamentally strong stocks in late trade. European counters largely traded on negative note ahead of a debt sale by France after Standard & Poor’s stripped the nation’s AAA rating and downgraded eight other European nations, escalating fears over the region's ability to end its debt crisis. In Asia, Japan’s Nikkei 225 Stock Average fell 1.4% even after a report showed the country’s machine orders in November jumped to the highest level since January 2008.

Domestic benchmark started off the trade with a gap down tailing the global peers which too made a soft start, though the cuts were not that severe but the impact of ratings downgrade by the S&P’s of the various European nations was clearly visible. Cable shares like Hathway Cable & Datacom and Hathway Bhawani Cabletel & Datacom and Den Network were in limelight and surged on early trades on report that Reliance Industries was planning to pick up a minimum 26 percent stake in leading cable operators, including multi-system operators. However, the market failed to gain momentum and dipped further in the mid morning session but fertilizers sector were buzzing on some reports that government is going to consider hike in urea prices ahead of state elections. The market took breath after December headline inflation came out which declined to a 2-year low finally boosting sentiments. The headline inflation fell to a two-year low of 7.47% in December 2011 on cheaper food items, a factor which may prompt the Reserve Bank to cut policy rates in the upcoming review. Encouraged by this, Finance Minister Pranab Mukherjee stated the declining rate of price rise indicates improvement in macro-economic parameters and projected March-end numbers at 6-7%. Finally the markets extended gains to trade above neutral line in the final hour with key benchmarks gaining momentum as risk-averse investors were back in the market with buying activity picking across the broad. Infosys rebounded to end up after the stock was hammered last week in the wake of lower dollar revenue growth guidance which led the CNX IT end higher.

On the global front, the US markets closed lower on Friday, on S&P’s action of ratings downgrade in Europe while, the Asian markets closed in negative on Monday ahead of a debt sale by France after Standard & Poor’s stripped the nation’s AAA rating and downgraded eight other European nations, stoking fears the region’s debt crisis may deteriorate. Moreover, major European counterparts were trading mixed with indices like CAC and FTSE were trading lower at this point of time while DAX has inched higher. Back home, broad based buying supported most of the sectoral indices on the NSE to settle in the positive territory with CNX IT surging the most and ending with a gain of 2.00% followed by CNX Infra up 1.01% and CNX PSU Bank up 0.79% while, CNX Energy down by 1.75% followed by CNX Pharma down 0.92% and CNX PSE down 0.65% were the top loser on the NSE sectoral indices. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, gained 2.51% and reached 24.07.

The India VIX witnessed addition of 2.51% at 24.07 as compared to its previous close of at 23.48 on Friday.

The 50-share S&P CNX Nifty gained 7.90 points or 0.16% to settle at 4,873.90.

Nifty January 2012 futures closed at 4,891.10 at a premium of 17.20 points over spot closing of 4,873.90, while Nifty February 2012 futures were at 4,911.50 at a premium of 37.60 points over spot closing. The near month January 2012 derivatives contract expires on Thursday, January 25, 2012. Nifty January futures saw contraction of 0.33 million (mn) units taking the total outstanding open interest (OI) to 21.25 mn units.

From the most active contract by contract value, SBI’s January 2012 futures were at a discount of 11.10 point at 1818.90 compared with spot closing of 1830.00. The number of contracts traded was 33,458.

Tata Motors January 2012 futures were at a premium of 0.55 point at 214.15 compared with spot closing of 213.60. The number of contracts traded was 16,953.

ICICI Bank January 2012 futures were at a discount of 0.25 points at 793.75 compared with spot closing of 794.00. The number of contracts traded was 27,218.

Infosys January 2012 futures were at a premium of 8.65 point at 2648.65 compared with spot closing of 2640.00. The number of contracts traded was 15,512.

Tata Steel January 2012 futures were at a premium of 0.40 point at 421.40 compared with spot closing of 421.00. The number of contracts traded was 23,604. 

Among Nifty calls, 5000 SP from the January month expiry was the most active call with an addition of 0.22 million open interest.

Among Nifty puts, 4700 SP from the January month expiry was the most active put with an addition of 0.06 million open interest.

The maximum OI outstanding for Calls was at 5000 SP (6.96 mn) and that for Puts was at 4700 SP (7.56 mn).

The respective Support and Resistance levels are: Resistance 4894.11 -- Pivot Point 4860.58 -- Support 4840.36.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.42 for January -month contract.

The top five scrips with highest PCR on OI were Union Bank 8.00, MAX 7.33, Hotel Leela 5.00, CESC 4.33 and JP Power 3.33.

Among most active underlying, SBI witnessed contraction of 0.005 million of Open Interest in the January month futures contract followed by Infosys which witnessed contraction of 0.49 million of Open Interest in the near month contract. Meanwhile Reliance Industries witnessed an addition of 0.37 million in the January month futures. Also, ICICI Bank witnessed contraction of 1.17 million in Open Interest in the January month contract. Finally, Tata Steel witnessed contraction of 0.07 million of Open Interest in the near month futures contract.