Bulls retaliate back; Nifty reclaims 5,350 mark

Bulls retaliated back on Tuesday and the local index S&P CNX Nifty snapped the day’s trade with a gain of about 1.80 percentage point. The Nifty made some attempts to reach the 5,400 level but was met with resistance throughout. Finally, Nifty managed to close comfortably over its crucial 5,350 mark and breached its four day’s losing streak. The market managed to recover most of its yesterday’s losses, supported by realty, banking, metals and infra stocks. Moreover, global markets too were on the higher side where most of the Asian market ended higher on the back of ease in crude oil prices while, European counters were trading northward on anticipation that the ECB’s second round of cheap long-term loans tomorrow would further ease balance sheet pressure among banks.

Initially, market made a decent opening and regained its crucial 5,300 mark as sentiments turned bullish in the morning trade after falling the most in five months on Monday spooked by crude oil prices. Afterwards, market continued its northward journey and breached its crucial 4,350 mark supported by Anil Ambani group stocks. Reliance Infra was the top gainer on the Nifty while Reliance Communications and Reliance Power too edged higher by over six percent. In the early noon trade market witnessed resistance near its psychological 5,400 mark and index pared some of its gains. Meanwhile, India's infrastructure sector output grew 0.5% in January from a year earlier, sharply lower than the upwardly revised annual growth of 4.6% in the previous month, government data showed on Tuesday. In the final hour of trade, market regained its strength and traded comfortably over its crucial 5,350 mark supported by ease in crude oil prices. Oil dropped for a second day today, losing as much as 0.6% to $107.89 a barrel, potentially cutting costs for companies in India, which imports three-quarters of its oil. Finally, Nifty snapped the terrific day of trade way above its crucial 5,350 mark with a gain of 90 points with Reliance Industries, financials and capital goods leading the gains.

On the global front, the US markets made a mixed closing overnight supported by the better than expected housing data and a pullback in the energy sector while, ease in oil prices and uptick in US housing pulled Asian markets higher on Tuesday. Moreover, most of 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 6.19% followed by CNX PSU Bank up 5.70% and Bank Nifty up by 3.76% while CNX IT and CNX FMCG declined 0.55% and 0.11% in the trade, respectively. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 5.88% and reached 25.84.

The India VIX witnessed contraction of 5.58% at 25.85 as compared to its previous close of at 27.38 on Monday.

The 50-share S&P CNX Nifty gain 94.30 points or 1.79% to settle at 5375.50.

Nifty March 2012 futures closed at 5,441.50 at a premium of 66.00 points over spot closing of 5,375.50, while Nifty April 2012 futures were at 5,474.85 at a premium of 99.35 points over spot closing. The near month March 2012 derivatives contract expires on Thursday, March 29, 2012. Nifty March futures saw an addition of 0.66 million (mn) units taking the total outstanding open interest (OI) to 25.49 mn units.

From the most active contract, Tata Motors March 2012 futures were at a premium of 2.05 point at 275.95 compared with spot closing of 273.90. The number of contracts traded was 17,862.

DLF March 2012 futures were at a premium of 2.90 point at 228.40 compared with spot closing of 225.50. The number of contracts traded was 11,200.

HDIL March 2012 futures were at a premium of 1.60 points at 114.30 compared with spot closing of 112.70. The number of contracts traded was 18,653.

RIL March 2012 futures were at a premium of 11.45 point at 807.35 compared with spot closing of 795.90. The number of contracts traded was 15,164.

Tata Steel March 2012 futures were at a premium of 1.60 point at 461.40 compared with spot closing of 459.80. The number of contracts traded was 15,233.

Among Nifty calls, 5500 SP from the March month expiry was the most active call with an addition of 0.14 million open interest.

Among Nifty puts, 5200 SP from the March month expiry was the most active put with an addition of 0.98 million open interest.

The maximum OI outstanding for Calls was at 5500 SP (3.86 mn) and that for Puts was at 5200 SP (7.31mn).

The respective Support and Resistance levels are: Resistance 5408.91 -- Pivot Point 5357.68 -- Support 5324.26.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.46 for March -month contract.

The top five scrips with highest PCR on OI were ABG Ship 9.00, PNB 2.81, ABB 2.00, CANBK 2.00 and Tata Chemical 2.00.

Among most active underlying, Suzlon witnessed contraction of 0.41 million of Open Interest in the March month futures contract followed by IFCI which witnessed an addition of 0.70 million of Open Interest in the near month contract. Meanwhile LITL witnessed an addition of 2.22 million in the March month futures. Also, Tata Motors witnessed an addition of 2.07 million in Open Interest in the March month contract. Finally, RCOM witnessed an addition of 0.43 million of Open Interest in the near month futures contract.