Bulls continue its run for third straight session; Nifty ends above 4,950 mark

Bulls took full control on the street today to book the trade in green for third straight session despite markets traded sideways at the final hour of trade. Buying action was intensified across the board with investors accumulating stock from every sector, which ended the remarkable day of trade with benchmark Nifty gaining around close to two percent. All the Asian equity indices rallied on Tuesday following Chinese fourth quarter GDP data which showed the world's second largest economy grew at a faster pace than expected in the fourth quarter and helped soothe fears that Europe's debt-related problems will slow the Chinese economy. Other key Chinese data, including retail sales and industrial output, also beat estimates. Though the optimism was also coupled by French bond sale but the first major test of France's fiscal credibility comes on Thursday, when it attempts to sell between 7.5 and 9.5 billion euros' worth of longer term bonds.

Domestic benchmark started off the trade with a marginal gap-up opening and strengthened further in the morning trade on better than expected numbers from IT major HCL Technology, which boosted the morale of the investors. The company has garnered 18 deals across the sector with total contract value exceeding $1 billion this quarter that has helped in a better performance. At the same time airlines stock were buzzing as the group of ministers would consider a proposal to allow foreign airlines to buy stake into domestic carriers. The ministers will also discuss the group of secretaries' recommendation to allow domestic carriers to import fuel directly rather than buying it from oil marketing companies. The market extended gains and optimism continued with the metal gauge taking the lead after China reported a better than expected GDP numbers for the December quarter. However, UP based sugar stocks remained in somber mood in the session after the Apex court directed the private sugar mill owners in Uttar Pradesh to clear the dues of sugarcane growers. Further, interest rate sensitive realty, auto and banking stocks were also in action on expectations that the Reserve Bank of India will start cutting interest rates in the coming months to prop up slowing economy. However, the main action among the frontline was captured by Maruti Suzuki India climbing higher by more than 10% on reports that the company has raised prices of all its vehicles by 0.3% to 3.4% due to adverse foreign exchange movements and a rise in commodity prices. Though there was no looking back for bulls in the market, but the index traded flat in the last hour of trade ending the session in green.

On the global front, the US markets remained closed on Monday on account of Martin Luther King Jr. Day while, the Asian markets closed on a positive note on Tuesday following Chinese fourth quarter GDP data. For the Oct-Dec quarter, China's gross domestic product although at a 2.5-year low, was better-than-expected at 8.9%. Moreover, major European counterparts were trading in green on optimistic note with indices like CAC, FTSE and DAX were seen trading higher after yesterday’s successful French bond sale. Back home, broad based buying supported the sectoral indices barring CNX Media on the NSE, to settle in the positive territory with CNX Realty surging the most and ending with a gain of 3.65% followed by CNX Metal up 3.56% and CNX MNC up 2.90% while, CNX Media was down by 0.85% the sole loser on the NSE sectoral indices. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, lost 6.06% and reached 22.61.

The India VIX witnessed contraction of 6.07% at 22.61 as compared to its previous close of at 24.07 on Monday.

The 50-share S&P CNX Nifty gained 93.40 points or 1.92% to settle at 4,967.30.

Nifty January 2012 futures closed at 4,977.00 at a premium of 9.70 points over spot closing of 4,967.30, while Nifty February 2012 futures were at 4,998.65 at a premium of 31.35 points over spot closing. The near month January 2012 derivatives contract expires on Thursday, January 25, 2012. Nifty January futures saw addition of 1.21 million (mn) units taking the total outstanding open interest (OI) to 22.47 mn units.

From the most active contract by contract value, Tata Motors January 2012 futures were at a premium of 0.25 point at 216.85 compared with spot closing of 216.60. The number of contracts traded was 21,046.

SBI’s January 2012 futures were at a premium of 4.45 point at 1843.30 compared with spot closing of 1838.85. The number of contracts traded was 31,014.

RIL January 2012 futures were at a premium of 3.35 points at 743.65 compared with spot closing of 740.30. The number of contracts traded was 35,128.

L&T January 2012 futures were at a premium of 5.35 point at 1268.35 compared with spot closing of 1263.00. The number of contracts traded was 19,193.

ICICI Bank January 2012 futures were at a premium of 3.70 point at 788.70 compared with spot closing of 785.00. The number of contracts traded was 27,016.

Among Nifty calls, 5000 SP from the January month expiry was the most active call with contraction of 0.13 million open interest.

Among Nifty puts, 4700 SP from the January month expiry was the most active put with contraction of 0.18 million open interest.

The maximum OI outstanding for Calls was at 5000 SP (6.83 mn) and that for Puts was at 4700 SP (7.38 mn).

The respective Support and Resistance levels are: Resistance 4993.90 -- Pivot Point 4948.95 -- Support 4922.35.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.59 for January -month contract.

The top five scrips with highest PCR on OI were Union Bank 8.00, MAX 7.33, CESC 7.14, JP Power 6.67 and Hotel Leela 5.00.

Among most active underlying, Reliance Industries witnessed contraction of 0.34 million of Open Interest in the January month futures contract followed by SBI which witnessed contraction of 0.54 million of Open Interest in the near month contract. Meanwhile Tata Steel witnessed contraction of 0.40 million in the January month futures. Also, TCS witnessed an addition of 0.21 million in Open Interest in the January month contract. Finally, Tata Motors witnessed contraction of 2.81 million of Open Interest in the near month futures contract.