Bulls back in action in late trade; Nifty surpasses 5,300 mark

Bulls continue to beat bears with Nifty gaining for the fourth straight day on Friday. Nifty snapped the day’s trade recapturing to register their fifth consecutive weekly gain since September 2010, led by heavyweight Reliance Industries and private banking majors. Market traded flat-to-negative till first half but, took a turn to rally in late trade to close with gains of over a percentage point following recovery in the European markets. However, the investors were waiting for the US monthly non-farm payroll data to gauge the health of the US economy. Meanwhile, the rupee climbed to a three-month high, propelled by dollar inflows and gains in the local share market.

In the morning it was looking like a consolidation session after a rally in previous three days and the domestic index started the day on the flat note mirroring mixed global cues. Telecom stocks continue to reel under selling spell after Supreme Court’s verdict on 2G Case. Scrips like Idea Cellular, Reliance Communication and MTNL all edged lower in the trade. Afterwards, the benchmark traded in tight band near its neutral lines indicating that the Indian market will consolidate. But, it was the last leg of trade where market took U-turn and witnessed a spick-up of 50-60 points tracing recovery in European counters, helped by encouraging macroeconomic data in the euro zone and the UK. Meanwhile, there were supportive news that helped the markets keep themselves in green territory; the Indian services sector grew at its fastest pace in January, as compared to the last six months. The growth has been led by financial intermediation, hotels and restaurant sub-sectors. The expansion has been due to the improvement in the global economic scenario which led to a rise in new work orders. Finally, Nifty snapped the day’s trade recapturing its crucial 5,300 level with a gain of over a percentage point.

On the global front, the US markets made a mixed closing overnight while, Asian stock markets snapped the day’s trade on mixed note on Friday as many investors took to the sidelines ahead of crucial jobs data from the US later in the global day, with Seoul and Tokyo stocks undermined by largely weaker earnings. Moreover, the European counterparts were trading in positive terrain at this point of time. Back home, most of the sectoral indices on the NSE were settled in the green, CNX Realty remained the major gainer, up 1.95% followed by CNX Pharma up 1.54% and CNX PSE up by 1.54% while CNX Metal declined 1.12% remained the lone loser in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 1.68% and reached 24.09.

The India VIX witnessed an addition of 1.68% at 24.09 as compared to its previous close of at 23.69 on Thursday.

The 50-share S&P CNX Nifty gained 55.95 points or 1.06% to settle at 5,325.85.

Nifty February 2012 futures closed at 5,345.55 at a premium of 19.70 points over spot closing of 5,325.85, while Nifty March 2012 futures were at 5,374.50 at a premium of 48.65 points over spot closing. The near month February 2012 derivatives contract expires on Thursday, February 23, 2012. Nifty February futures saw an addition of 0.62 million (mn) units taking the total outstanding open interest (OI) to 22.52 mn units.

From the most active contract by contract value, Tata Motors February 2012 futures were at a premium of 1.60 point at 248.40 compared with spot closing of 246.80. The number of contracts traded was 13,207.

DLF February 2012 futures were at a premium of 2.10 point at 231.65 compared with spot closing of 229.55. The number of contracts traded was 14,690.

HDFC Bank February 2012 futures were at a premium of 2.90 point at 509.95 compared with spot closing of 507.05. The number of contracts traded was 10,132.

Tata Steel February 2012 futures were at a premium of 4.95 point at 469.55 compared with spot closing of 464.60. The number of contracts traded was 16,444.

ICICI Bank February 2012 futures were at a premium of 5.40 point at 920.70 compared with spot closing of 915.30. The number of contracts traded was 23,955.

Among Nifty calls, 5300 SP from the February month expiry was the most active call with contraction of 0.87 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 (4.90 mn) and that for Puts was at 5000 SP (6.95 mn).

The respective Support and Resistance levels are: Resistance 5355.28 -- Pivot Point 5305.41 -- Support 5275.98.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.64 for February-month contract.

The top five scrips with highest PCR on OI were Areva T&D 9.33, IOB 5.00, Polaris 3.80, India Cement 3.67 and United Phosphorus 3.00.

Among most active underlying, Alok Textiles witnessed an addition of 1.67 million of Open Interest in the February month futures contract followed by Unitech which witnessed an addition of 2.12 million of Open Interest in the near month contract. Meanwhile IFCI witnessed contraction of 0.10 million in the February month futures. Also, Tata Motors witnessed contraction of 0.35 million in Open Interest in the February month contract. Finally, JP Associates witnessed an addition of 3.99 million of Open Interest in the near month futures contract.