Bulls continue to capitalize on firm global cues; Nifty surpasses 5,500 mark

After two days of consolidation, Nifty triumphed on Wednesday surpassing its crucial 5,500 mark with triple digit rally on the back of buying interest visible across the sectors amid positive global cues. This was for the first time since August 2011 the key index breached the psychological 5,500 level. Asian stocks climbed after China pledged to help resolve the Europe’s debt crisis while, European counters too trading higher at this point of time as Greek leaders said they would provide written austerity promises in exchange for a European Union-led bailout. On domestic front, buying in realty, banking and auto stocks too added the sentiments.

Buoyed by firm Asian cues, Indian benchmarks made a gap-up opening with Nifty recapturing its crucial 5,450 mark in initial trade. The sentiments were also supported by rally in Tata Motors after better than expected numbers in Q3 on account of JLR performance. However, its standalone performance remianed disappointing due to raw material pressures and higher marketing spends. Afterwards, market continued its northbound journey and surpassed its crucial 5,500 level supported by interest sensitive sectors such as realty, auto, infra and banking stocks which remained on the investors radar on hopes that the Reserve Bank of India (RBI) may cut interest rates in March, after inflation rate based on the wholesale price index (WPI) fell to 6.55% in January, 2012, the lowest level in over two years. It was 7.47% in December, 2011, and 9.47% in January, 2011. Moreover, firm opening in European counters too aided the investors’ morale and market continued its up-move. But in the final hour of trade, markets lost some of its gains and dipped below its crucial 5,500 mark. Index heavyweight Reliance Industries (RIL) edged lower by 1.50% on reports that the gas output from the company’s D6 block in the Krishna-Godavari (KG) basin may be 66% lower than the initial estimate from April. Hindustan Unilever is also faced some amount of selling pressure. However, market regained strength in last few minutes of trade and finally nifty snapped the day’s trade comfortably over its crucial 5,500 level with a gain of over two percentage point.

On the global front, the US markets managed to close on a flat note on Tuesday as the markets there recovered in late trade after a dismal start while, sentiments remained bullish in Asian region and all the Asian equity indices snapped the day’s trade in the green after Greece indicated a willingness to commit to spending cuts to secure its bailout while, moves by Japan’s central bank to support the economy lifted its powerhouse export sector too supported the sentiments. Moreover, European counterparts were trading in the green where CAC, DAX and FTSE were up by 0.50-1.50 percent at this point of time. Back home, all the sectoral indices on the NSE settled in the positive territory with CNX Realty gaining the most, up 4.72% followed by CNX Infra up by 3.94%, Bank Nifty up by 3.54% and CNX Auto up by 3.36% in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 2.68% and reached 22.10.

The India VIX witnessed a decline of 2.69% at 22.10 as compared to its previous close of at 22.71 on Tuesday.

The 50-share S&P CNX Nifty added 115.90 points or 2.14% to settle at 5,531.95.

Nifty February 2012 futures closed at 5,552.55 at a premium of 20.60 points over spot closing of 5,531.95, while Nifty March 2012 futures were at 5,586.60 at a premium of 54.65 points over spot closing. The near month February 2012 derivatives contract expires on Thursday, February 23, 2012. Nifty February futures saw an addition of 0.72 million (mn) units taking the total outstanding open interest (OI) to 24.98 mn units.

From the most active contract, Tata Motors February 2012 futures were at a discount of 1.30 point at 286.45 as compared with spot closing of 287.75. The number of contracts traded was 34,652.

Reliance Communications February 2012 futures were at a premium of 0.60 point at 105.15 compared with spot closing of 104.55. The number of contracts traded was 15,481.

DLF February 2012 futures were at a discount of 0.55 point at 249.20 compared with spot closing of 249.75. The number of contracts traded was 18,054.

BHEL February 2012 futures were at a premium of 0.30 point at 278.30 compared with spot closing of 278.00. The number of contracts traded was 15,375.

Tata Steel February 2012 futures were at a premium of 1.10 point at 496.45 compared with spot closing of 495.35. The number of contracts traded was 19,457.

Among Nifty calls, 5600 SP from the February month expiry was the most active call with a contraction of 1.08 million open interest. 

Among Nifty puts, 5300 SP from the February month expiry was the most active put with a contraction of 0.42 million open interest.

The maximum OI outstanding for Calls was at 5600 SP (5.69 mn) and that for Puts was at 5300 SP (6.77 mn).

The respective Support and Resistance levels are: Resistance 5562.5-- Pivot Point 5511.55-- Support 5481.

The Nifty Put Call Ratio (PCR) OI wise stood at 2.02 for February -month contract.

The top five scrips with highest PCR on OI were Patel Engineering 13.67, Canara Bank 10.80, Federal Bank 9.00, OnMobile 8.50 and Max India 7.43.

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 a contraction of 0.24 million of Open Interest in the near month contract. Meanwhile Reliance Communication witnessed a contraction of 0.11 million in the February month futures. Further, JP Associate witnessed an addition of 0.07 million in Open Interest in the February month contract. Finally, Bharti Airtel witnessed an addition of 0.12 million of Open Interest in the near month futures contract.