Bullish sentiments pull market higher; Nifty reclaims 5,250 mark

Sentiments remained bullish for third consecutive day with Nifty recapturing 5,250 mark tracking sanguine global cues as the US markets climbed overnight, while the Asian markets showed jubilation with the good manufacturing numbers across the globe. Though, the European debt crisis lingered but the better than anticipated economic data from the world’s largest economy boosted the morale of the investors across the globe. Back home, telecom stocks remained in the spotlight through most part of the day’s trade after the Supreme Court revoked all 122 telecoms licences issued under a scandal-tainted 2008 sale and plunged the telecoms market of Asia's third-largest economy into uncertainty.

Earlier, market made a gap-up start hitting 12 weeks high on the back of supporting global cues. The investors’ morale got underpinned after better-than-anticipated manufacturing reports from the global growth engines like China and India along with upbeat factory activity data from developed economies like the US and EU, spurred hopes that a recovery could be back on track. Moreover, continued capital inflows by foreign funds following an improvement in the sentiments on better-than-expected third quarter earnings by some corporates and strong sales in January by auto makers also supported the rally. In the mid morning trade, the markets shocked on the verdict of Supreme Court over the 2G scam case and market slipped in the red, touching the lowest point of the day. The apex court canceled the 122 licences granted by former telecom minister A Raja, holding that the scandal-tainted 2008 sale was conducted in “totally arbitrary and unconstitutional” manner. Though, Union Home Minister P Chidambaram got relief as the SC directed the trial court to examine his alleged role in the grant of spectrum. Licences held by five companies were cancelled in the verdict, while a fine of Rs 5 crore each on three telecom companies was imposed who offloaded their shares after getting the licences. But, the jitters were momentary and the markets recovered quite well from that level. Largest operator Bharti Airtel jumped about 7 percent, its biggest percentage gain in almost 19 months, on expectations it would be a beneficiary of the ruling, while Reliance Communications and Unitech, the Indian partner of Norway's Telenor, fell 3.5 percent and 7 percent, respectively. Finally, market snapped the day’s trade recapturing its psychological 5,250 mark with a gain of over half a percent.

On the global front, the US markets surged overnight on the back of strong manufacturing data while, sentiments continue to remain sanguine in Asia and all the indices barring Straits Times ended the session in the positive terrain on Thursday as investors’ confidence encouraged by better than expected manufacturing data from the US, Europe and China, suggesting resilience in the global factory sector that helped to paint a brighter picture of the global economic outlook. However, 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 Infra remained the major gainer, up 2.02% followed by CNX Metal up 1.60% and CNX MNC up by 1.56% while CNX Pharma and CNX Media declined 1.15% and 0.19% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 3.49% and reached 23.69.

The India VIX witnessed an addition of 3.49% at 23.69 as compared to its previous close of at 22.89 on Wednesday.

The 50-share S&P CNX Nifty gained 34.20 points or 0.65% to settle at 5,269.90.

Nifty February 2012 futures closed at 5,274.35 at a premium of 4.45 points over spot closing of 5,269.90, while Nifty March 2012 futures were at 5,300.85 at a premium of 30.95 points over spot closing. The near month February 2012 derivatives contract expires on Thursday, February 23, 2012. Nifty February futures saw an addition of 0.09 million (mn) units taking the total outstanding open interest (OI) to 21.89 mn units.

From the most active contract by contract value, Reliance Communications February 2012 futures were at a premium of 1.15 point at 97.25 compared with spot closing of 96.10. The number of contracts traded was 21,650.

DLF February 2012 futures were at a premium of 1.00 point at 227.05 compared with spot closing of 226.05. The number of contracts traded was 28,853.

BHEL February 2012 futures were flat at 257.90 compared with spot closing of 257.90. The number of contracts traded was 13,714.

Tata Steel February 2012 futures were at a discount of 0.65 point at 474.15 compared with spot closing of 474.80. The number of contracts traded was 23,735.

ICICI Bank February 2012 futures were at a premium of 2.80 point at 903.80 compared with spot closing of 901.00. The number of contracts traded was 40,210.

Among Nifty calls, 5300 SP from the February month expiry was the most active call with contraction of 0.10 million open interest. 

Among Nifty puts, 5000 SP from the February month expiry was the most active put with an addition of 0.41 million open interest.

The maximum OI outstanding for Calls was at 5300 SP (5.77 mn) and that for Puts was at 5000 SP (6.54 mn).

The respective Support and Resistance levels are: Resistance 5297.98 -- Pivot Point 5261.86 -- Support 5233.78.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.52 for February -month contract.

The top five scrips with highest PCR on OI were Polaris 3.80, United Phosphorus 3.00, Canara Bank 2.60, Crompton Greaves 2.11 and JP Power 2.08.

Among most active underlying, Suzlon witnessed contraction of 2.38 million of Open Interest in the February month futures contract followed by Unitech which witnessed an addition of 1.83 million of Open Interest in the near month contract. Meanwhile IFCI witnessed contraction of 4.29 million in the February month futures. Also, Tata Motors witnessed contraction of 1.35 million in Open Interest in the February month contract. Finally, JP Associates witnessed contraction of 3.46 million of Open Interest in the near month futures contract.