Jubilation sparks on Dalal Street to drive Nifty above 5,000 mark

Bulls took full control on the Dalal Street today for the whole part of the trade ending yesterday’s bears vengeance giving them no signs to enter the market. The sentiments were in full spirit on account of broad based buying barring IT and FMCG stocks, marking the key benchmark to end at their 6-week closing highs. All the Asian equity indices traded in green rising to their one-month high on back of positive US economic data and on hopes that the International Monetary Fund would boost its resources to help tackle the euro zone debt crisis. The European markets were however trading on a mix note. The IMF stated that it is looking to raise up to $500 billion in additional lending resources, including a $200 billion commitment that euro area governments announced last year. The new target is based on the IMF's estimate of $1 trillion in potential global financing needs in the coming years. However, back home Nifty managed to close above its crucial 5,000 level, led by index heavyweights.

Domestic benchmark started the trade with a gap-up opening as the bulls barged in with renewed vigor taking cues from the global markets. All rate sensitive’s surged with metal counter taking the lead on expectation of demand revival from the Europe. The power stocks too came into jubilant mood after a high level delegation comprising top corporate leaders of the power industry met Prime Minister yesterday, PM has given full assurance to address all their issues in a credible and commercially sustainable way, pledging a practical, pragmatic and viable solution to the industry's problems. At the same time, Bharti Airtel was trading under pressure after the income-tax department has slapped a Rs 1,067-crore demand notice on it, for its alleged non-payment of Tax Deducted at Source (TDS) dues in the last four financial years in relation to its overseas operations. The markets did trim its gain marginally on twice occasion in between throughout the trade, but positive news flow on domestic front did help to fuel momentum for the run. The weekly food inflation number measured by the Wholesale Price Index (WPI), remained in the negative terrain for the third straight week for the week ended January 7, 2012 at -0.42% from its previous levels of -2.90% for the week ended December 31. However, the IT and technology stocks have extended their somber run and were down amid expectations that slowdown in major software and technology importing regions like Europe and the US will impact future earnings. At the end there was slew of good earnings announcements that kept the markets spirit higher, IT company Mindtree reported 98.69% rise in its December quarter profits, Bajaj Auto reported 19% rise in its profits to Rs 795.19 crore, while the banking major HDFC Bank posted a profit growth of 31.4% and its NIM increased by 12.2%. The other two-wheeler major, Hero Moto Corp came up with better than expected numbers, its profit for the December quarter expanded by 43%. Finally, Nifty ended the day’s trade to close at their 6-week closing highs on back of buying in index heavyweights.

On the global front, the US markets closed higher on Wednesday, as sentiments got a lift on account of investors welcoming other signs of improving global economic growth like upbeat report on the housing market and Goldman Sachs earnings. The Asian markets too closed on higher side on Thursday. Japan's Nikkei average rose as much as 1.4% to a five-week high. Asian credit markets were calm while Chinese market was up with report that China’s central bank is allowing a limited increase in first-quarter lending by the five biggest banks and the nation’s banking regulator is weighing a plan to relax capital requirements. Moreover, major European counterparts were trading on a mixed pack with indices like CAC and FTSE edging higher while DAX was seen trading lower. Further, Greek government officials and the group representing private sector investors and banks resumed talks yesterday, trying to nail down how big write-down private investors are willing to take on the country's bonds. The talks ended without an agreement, but will resume on Thursday. Back home, broad based buying was witnessed across the sectoral indices barring CNX IT and CNX FMCG on the NSE, which traded to settle in negative territory. The CNX IT was the top loser on sectoral front which ended with a loss of 0.32% followed by CNX FMCG which was down by 0.14% while, CNX Realty was up by 3.54%, CNX Metal up 2.73% and Bank Nifty was up by 1.95% were the top gainer on the NSE sectoral indices. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, lost 4.40% and reached 21.68.

The India VIX witnessed contraction of 4.41% at 21.68 as compared to its previous close of at 22.68 on Wednesday.

The 50-share S&P CNX Nifty gained 62.60 points or 1.26% to settle at 5,018.40.

Nifty January 2012 futures closed at 5,022.30 at a premium of 3.90 points over spot closing of 5,018.40, while Nifty February 2012 futures were at 5,045.60 at a premium of 27.20 points over spot closing. The near month January 2012 derivatives contract expires on Thursday, January 25, 2012. Nifty January futures saw contraction of 1.08 million (mn) units taking the total outstanding open interest (OI) to 19.99 mn units.

From the most active contract by contract value, SBI’s January 2012 futures were at a premium of 8.05 point at 1888.25 compared with spot closing of 1880.20. The number of contracts traded was 38,115.

RIL January 2012 futures were at a premium of 0.80 point at 785.20 compared with spot closing of 784.40. The number of contracts traded was 30,405.

ICICI Bank January 2012 futures were at a discount of 0.65 points at 799.35 compared with spot closing of 800.00. The number of contracts traded was 25,428.

Bajaj Auto January 2012 futures were at a premium of 1.00 point at 1472.25 compared with spot closing of 1471.25. The number of contracts traded was 13,728.

Tata Motors January 2012 futures were at a discount of 0.90 point at 218.10 compared with spot closing of 219.00. The number of contracts traded was 10,852.

Among Nifty calls, 5100 SP from the January month expiry was the most active call with contraction of 0.31 million open interest.

Among Nifty puts, 4800 SP from the January month expiry was the most active put with an addition of 0.37 million open interest.

The maximum OI outstanding for Calls was at 5100 SP (7.09 mn) and that for Puts was at 4800 SP (7.19 mn).

The respective Support and Resistance levels are: Resistance 5031.00 -- Pivot Point 5011.20 -- Support 4998.60.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.78 for January -month contract.

The top five scrips with highest PCR on OI were CESC 8.33, Union Bank 8.00, Videocon Industries 6.50, McLeod Russel 6.38 and Gitanjali 6.06.

Among most active underlying, SBI witnessed contraction of 1.82 million of Open Interest in the January month futures contract followed by Reliance Industries which witnessed contraction of 1.04 million of Open Interest in the near month contract. Meanwhile ICICI Bank witnessed contraction of 0.96 million in the January month futures. Also, Infosys witnessed contraction of 0.29 million in Open Interest in the January month contract. Finally, Tata Steel witnessed contraction of 0.66 million of Open Interest in the near month futures contract.