Positive sentiments charge bulls; Nifty closes near 5050 mark

Bulls took control on the Dalal Street on the last trading day of the week, extending its yesterday’s rally and witnessing a terrific day of trade garnering gains of over half a percentage point. The optimism was fueled on the back of strong global cues and slew of earnings announcement which kept markets buzzing. All the Asian indices traded in green barring Jakarta Composite which lost around one third percentage. The optimistic was on back of strong earnings and positive jobs data from US which added to hopes that the economic recovery in the world’s largest economy is for real. The European markets were however trading on a negative note despite it managed to successfully conclude the debt sale of Spain and France yesterday.

Nifty started with a gap-up opening extending its last sessions' rally, initially the trade remained choppy but slowly it started gathering momentum surging past their another crucial level of 5050 in opening trade. Also, IT sector was witnessing some buying after the sector heavyweight Wipro reported net profit rise of 10.43% to Rs 1456.40 crore for the quarter ended December 31, 2011. The momentum continued and the benchmarks started inching higher with renewed buying investors. The banking pack was in the jubilant mood as most of the banks who have reported their numbers so far have came up with inline numbers, also in their pre-budget demand banks and financial institutions have sought more tax sops from the finance ministry, arguing that the greater deposit mobilisation through incentives will help them lend more when the economy recovers. Besides, the top bankers suggested that the government should increase the limit on tax deducted at source (TDS) on interest from bank deposits to Rs 50,000, from Rs 10,000 at present. Later on the index trimmed its gain in the final hours to trade in red but quickly regained momentum to be back in green. However, all eyes were set on index heavyweight Reliance Industries ahead of its board meeting, scheduled later today, to consider a proposal for buyback of equity shares along with Q3 December 2011 earnings which will further shape the direction of the markets. Finally, Indian markets snapped another day of rally with benchmark indices posting around 4 percent of gains for the week.

On the global front, the US markets closed higher on Thursday, as sentiments got a lift on account of an upbeat economic data after weekly jobless claims fell more than anticipated while consumer prices remained unchanged. The Asian markets too closed on higher side on Friday barring Jakarta Composite. Chinese shares and commodities rose, shrugging off the HSBC flash manufacturing purchasing managers index (PMI), the earliest indicator of China's industrial activity, which stood nearly steady at 48.8 in January from 48.7 in December. Moreover, European counterparts were trading in red with indices like CAC, DAX and FTSE were seen trading lower. Back home, broad based buying was witnessed across the sectoral indices on the NSE, which traded to settle in positive territory. The Bank Nifty was the top gainer on sectoral front which ended with a gain of 3.45% followed by CNX PSU Bank which was up by 3.23% and CNX Service which was up 1.52% while, CNX FMCG was down by 2.29%, CNX Media down 1.48% and CNX Pharma down by 0.47% were the top losers. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, gained 1.29% and reached 21.96.

The India VIX witnessed an addition of 1.29% at 21.96 as compared to its previous close of at 21.68 on Thursday.

The 50-share S&P CNX Nifty gained 30.20 points or 0.60% to settle at 5,048.60.

Nifty January 2012 futures closed at 5,047.85 at a discount of 0.75 points over spot closing of 5,048.60, while Nifty February 2012 futures were at 5,077.55 at a premium of 28.95 points over spot closing. The near month January 2012 derivatives contract expires on Thursday, January 25, 2012. Nifty January futures saw contraction of 2.21 million (mn) units taking the total outstanding open interest (OI) to 17.77 mn units.

From the most active contract by contract value, Axis Bank January 2012 futures were at a discount of 24.25 point at 993.75 compared with spot closing of 1018.00. The number of contracts traded was 43,577.

ICICI Bank January 2012 futures were at a discount of 6.85 point at 840.15 compared with spot closing of 847.00. The number of contracts traded was 48,368.

SBI’s January 2012 futures were at a discount of 9.10 points at 1927.90 compared with spot closing of 1937.00. The number of contracts traded was 37,894.

Tata Motors January 2012 futures were at a discount of 0.40 point at 219.60 compared with spot closing of 220.00. The number of contracts traded was 15,490.

RIL January 2012 futures were at a premium of 0.35 point at 794.45 compared with spot closing of 794.10. The number of contracts traded was 34,101.

Among Nifty calls, 5100 SP from the January month expiry was the most active call with contraction of 0.81 million open interest. 

Among Nifty puts, 4800 SP from the January month expiry was the most active put with contraction of 0.24 million open interest.

The maximum OI outstanding for Calls was at 5100 SP (6.28 mn) and that for Puts was at 4800 SP (6.95 mn).

The respective Support and Resistance levels are: Resistance 5073.73 -- Pivot Point 5039.01 -- Support 5013.88.

The Nifty Put Call Ratio (PCR) OI wise stood at 2.01 for January -month contract.

The top five scrips with highest PCR on OI were OnMobile 8.00, McLeod Russel   7.89, Dabur 6.08, Hotel Leela 5.00 and ZEEL 3.60.

Among most active underlying, Reliance Industries witnessed contraction of 1.48 million of Open Interest in the January month futures contract followed by ICICI Bank which witnessed contraction of 0.93 million of Open Interest in the near month contract. Meanwhile SBI witnessed contraction of 0.70 million in the January month futures. Also, Axis Bank witnessed contraction of 0.35 million in Open Interest in the January month contract. Finally, Tata Steel witnessed contraction of 3.50 million of Open Interest in the near month futures contract.