Nifty snaps January F&O series higher by 11%

Widely followed 50 share index S&P CNX Nifty finally concluded its jubilant run for the January series recapturing its crucial 5,150 level amidst strong global cues, a day after Reserve Bank of India slashed cash reserve requirement for banks by 50 basis points. Moreover the index performed splendidly during the series and closed higher by about 512 points or 11.02 percent compared to last series. After commencing the session on an optimistic note, Nifty snapped the day’s trade with a gain of over half a percentage point.

Earlier, the index made decent start hitting its highest level in more than ten weeks with Nifty reclaiming its crucial 5,150 level tracing positive cues from the Asian stock market. Optimism scattered across the market after the RBI signaled it would support growth, thereby, raising expectations for more foreign fund investments. However, market pared some of its gains in mid morning trade as profit booking witnessed in some of the index heavyweights. Afterwards, the index started its north bound journey bolstered by the improved the sentiment on the back of the gains in the Metal stocks. Meanwhile, sentiment also got lifted tracing the surge in the shares of sugar companies after the government issued permits to mills to export 5,92,036 metric tons of the sweetener, reports suggest. Among individual stocks, Balrampur Chini Mills, Shree Renuka Sugars, Bajaj Hindustan and Triveni Engineering ended higher by 4-8 percent. Positive opening in European counters too added to the optimistic milieu. In the final hour of trade, a bout of volatility witnessed as traders rolled over positions in futures & options (F&O) segment from the January series to February series. However, the contract expired a day earlier from its usual closing owing to a national holiday on the last Thursday of the month. In late trade, market trimmed some of its profit as European stocks reversed initial gains. Finally, Nifty ended the session with a gain of over half a percent recapturing crucial 5,150 level.

On the global front, the US markets remained under pressure of the European debt crisis and once again ended mixed. However, Sentiments remain jubilant for yet another day in the Asian region wherein most of the indices ended the trade in green on Wednesday, underpinned by strong earnings from US technology giant Apple. Most of the European counterparts were trading in the negative terrain at this point of time. Back home, most of the sectoral indices on the NSE were settled in the green, CNX Media remained the major gainer, up 3.01% followed by CNX Metal up 1.90% and CNX PSE up by 1.35% while CNX Realty declined 0.21% remained the lone loser in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 1.86% and reached 21.02.

The India VIX witnessed a contraction of 1.87% at 21.02 as compared to its previous close of at 21.42 on Tuesday.

The 50-share S&P CNX Nifty gained 30.95 points or 0.60% to settle at 5,158.30.

Nifty January 2012 futures closed at 5161.4 at a premium of 3.1 points over spot closing of 5158.30, while Nifty February 2012 futures were at 5181.55 at a premium of 23.25 points over spot closing. The near month January 2012 derivatives contract expired today i.e, January 25, 2012. Nifty January futures saw contraction of 3.99 million (mn) units taking the total outstanding open interest (OI) to 8.91 mn units.

From the most active underlying, SBI’s January 2012 futures were at a premium of 13 point at 2058 (mtm settlement price) compared with spot closing of 2045.00. The number of contracts traded was 35,538.

Tata Motors’ January 2012 futures were at a premium of 0.5 point at 230.95 compared with spot closing of 230.45. The number of contracts traded was 15,703.

Axis Bank’s January 2012 futures were at a premium of 9.65 points at 1063.65 compared with spot closing of 1054.00. The number of contracts traded was 20,838.

ICICI Bank’s January 2012 futures were at a discount of 4.6 point at 880.05 compared with spot closing of 875.45. The number of contracts traded was 23,747.

RIL’s January 2012 futures were at a discount of 0.05 point at 790.95 compared with spot closing of 791.00. The number of contracts traded was 24,907.

Among Nifty calls, 5200 SP from the January month expiry was the most active call with an addition of 4.61 million in open interest.

Among Nifty puts, 5100 SP from the January month expiry was the most active put with addition of 5.40 million in open interest.

The maximum OI outstanding for Calls was at 5200 SP (10.00 mn) and that for Puts was at 5100 SP (9.28 mn).

The respective Support and Resistance levels are: Resistance 5178.21-- Pivot Point 5154.23-- Support 5134.31.

The Nifty Put Call Ratio (PCR) OI wise stood at 2.73 for January-month contract.

The top five scrips with highest PCR on OI were Indusind Bank 34.50, Max India 26.00, Indraprashta Gas 17.67, Great Eastern Shipping Company 15.50 and Syndicate Bank 11.75.

SBI, ICICI Bank, Tata Motors, RIL and Infosys were among the most active underlying in the January month futures contract.