Bulls retaliated back in volatile trade; Nifty reclaims 5,350 mark

Bulls retaliated back on Wednesday in volatile trade and the local index S&P CNX Nifty snapped the day’s trade with a gain of over half a percentage point ahead of the outcome on Greece's debt deal. The Nifty made many attempts for reaching the 5,400 level but was met with resistance throughout however, after an extremely fickle last hour, the Nifty managed to close over its crucial 5,350 mark. The market managed to recover all of yesterday’s losses, supported by technology, metals, capital goods stocks, and Reliance and SBI. Moreover, Global markets too were on the higher side on hopes that the Greece debt deal may get done today. Greek officials reportedly have agreed on a draft deal and the proposal will be presented to Greek party leaders today.

Initially, a bout of volatility was witnessed in early trade and Indian equity market opened in the green terrain on the back of supportive global cues. However, the gains remained capped after weak result from India’s largest telecom player Bharti Airtel. The company’s consolidated net profit declined 22.40% to Rs 1011.30 crore for the quarter ended December 31, 2011 as compared to Rs 1303.30 crore for the same quarter in the previous year. In the mid morning trade, market started moving upward and recaptured its crucial 5,350 level as US futures indices too showed an uptick in the screen trade, thereby indicating positive opening of Wall Street. Sentiments also remained eminent after Global investment banking and securities firm Goldman Sachs on Tuesday upgraded Reliance Industries (RIL) to buy from neutral, citing a potential lift in margins on increased refining and recovering oil demand. Meanwhile, Technology shares were up on upbeat economic data from the US, where software majors earn most of their revenues through exports. Infosys, Wipro and TCS gained by 1.5-2 percent each. But, in the last leg of trade, market took a U-turn and turned red on the back of profit booking in some of the blue chip stocks. Meanwhile, weak Q3 numbers from ONGC too dampened the sentiments. State-owned explorer reported a 5 percent drop in its net profit in the quarter ended December 31 as a sharp rise in fuel subsidy output offset one-time gains it made from Cairn India's Rajasthan oilfields. But, it was the final hour of trade, where benchmark regained strength and captured its crucial 5,350 level back following firm European counters. Finally, Nifty snapped the terrific day of trade comfortably over its crucial 5,350 mark with a gain of 0.60 percentage points.

On the global front, the US markets rose overnight, sending the Dow industrials to their highest close since 2008, as Greece’s government made progress on measures to secure international aid while, Asian stock markets climbed on Wednesday, helped by signs of progress over debt restructuring talks in Greece. Moreover, all the European counterparts were trading in the 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 2.97% followed by CNX IT up 1.68% and CNX Metal up by 1.62% while CNX Pharma and CNX Media declined 0.19% and 0.11% in the trade, respectively. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 2.56% and reached 24.27.

The India VIX witnessed a contraction of 2.56% at 24.27 as compared to its previous close of at 24.91 on Tuesday.  The 50-share S&P CNX Nifty gained 33.00 points or 0.62% to settle at 5,368.15. Nifty February 2012 futures closed at 5,388.50 at a premium of 20.35 points over spot closing of 5,368.15, while Nifty March 2012 futures were at 5,415.95 at a premium of 47.80 points over spot closing. The near month February 2012 derivatives contract expires on Thursday, February 23, 2012. Nifty February futures saw an addition of 0.39 million (mn) units taking the total outstanding open interest (OI) to 25.65 mn units.

From the most active contract, Tata Motors February 2012 futures were at a premium of 0.65 point at 251.75 compared with spot closing of 251.10. The number of contracts traded was 14,771.

DLF February 2012 futures were at a discount of 0.80 point at 235.90 compared with spot closing of 236.70. The number of contracts traded was 13,910.

HDIL February 2012 futures were at a discount of 0.35 point at 90.60 compared with spot closing of 90.95. The number of contracts traded was 15,375.

Bharti Airtel February 2012 futures were at a premium of 3.60 point at 356.55 compared with spot closing of 352.95. The number of contracts traded was 19,898.

Tata Steel February 2012 futures were at a discount of 0.15 point at 451.25 compared with spot closing of 451.40. The number of contracts traded was 33,464.

Among Nifty calls, 5500 SP from the February month expiry was the most active call with an addition of 0.93 million open interest.

Among Nifty puts, 5200 SP from the February month expiry was the most active put with an addition of 0.35 million in open interests.

The maximum OI outstanding for Calls was at 5500 SP (6.46 mn) and that for Puts was at 5200 SP (7.69 mn).

The respective Support and Resistance levels are: Resistance 5401.63-- Pivot Point 5363.41-- Support 5329.93.

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 Max India 106, Mcleod Russel India 36, Areva T&D 27.33, OnMobile 16.00 and Canara Bank 7.50.

Among most active underlying, IFCI witnessed an addition of 0.40 million of Open Interest in the February month futures contract followed by Tata Motors which witnessed an addition of 0.04 million of Open Interest in the near month contract. Meanwhile Reliance Communication witnessed an addition of 0.60 million in the February month futures. Also, Hindalco witnessed an addition of 0.24 million in Open Interest in the February month contract. Finally, DLF witnessed a contraction of 0.07 million of Open Interest in the near month futures contract