Late hour recovery helps Nifty to consolidate

After two days of drastic fall, Indian domestic benchmark witnessed consolidation with Nifty snapping the session on a flat note. Though, market traded choppy most part of the day’s trade on Wednesday but, recovery in late trade helped Nifty to end flat. On the global front, Asian counters fell for a third day in a row as investors grew more risk averse, with renewed uncertainty over Greece’s bailout and mounting worries about slowing global economies overshadowing support from ample liquidity. However, European markets turned green after a choppy start. Meanwhile, rupee fell to a seven-week low early on Wednesday, extending a slide to a fifth consecutive session, on strong demand for dollars from oil refiners and slowing capital inflows as global risk appetite wanes. Rupee was at 50.59 to the dollar, it’s weakest since January 18 and off Tuesday’s close of 50.37.

Earlier, the Indian equity market made soft start following weak performance from global peers. Europe and US markets closed in the red overnight amidst fears of Greece defaulting on restructuring of its debt this week. Afterwards, bout of volatility was witnessed as key benchmark indices recouped almost the entire losses after hitting 5-week lows breaching its crucial 5,200 mark. The benchmark turned green in the mid morning trade as sentiments were supported by Reliance Anil Dhirubhai Ambani (ADA) Group shares which rose as Samajwadi Party is set to form government in Uttar Pradesh. Moreover, pharma stocks edged higher on defensive buying in a weak market too supported the sentiments. But, the recovery proved short-lived as key benchmark index once again slipped into the red in early afternoon trade and extended losses to hit fresh five-week lows in mid-afternoon trade breaching crucial 5,200 level. Meanwhile, metal stocks declined for the third consecutive day after China’s Premier Wen Jiabao on March 5, 2012, cut the country’s growth target to 7.5 percent for 2012, from an 8 percent goal in place since 2005. But, volatility ruled the roost as key benchmark cut intraday losses in late trade on firm European stocks. Finally Nifty ended the day’s trade on a flat note as sentiments were backed by bank stocks which reversed their intraday losses while, IT stocks rose on a weak rupee.  Meanwhile, CNX PSE lost the most, down by 1.62% on the NSE sectoral index followed by CNX Energy down by 1.45%, CNX Metal down by 1.41% while, CNX Realty and CNX IT up by 1.12% and 0.79% remained the top gainers in the trade, respectively. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, dipped 3.69% and reached 26.33.

The India VIX witnessed contraction of 3.69% at 26.33 as compared to its previous close of at 27.34 on Tuesday.

The 50-share S&P CNX Nifty lost 1.95 points or 0.04% to settle at 5220.45

Nifty March 2012 futures closed at 5,258.70 at a premium of 38.25 points over spot closing of 5,220.45, while Nifty April 2012 futures were at 5,297.00 at a premium of 76.55 points over spot closing. The near month March 2012 derivatives contract expires on Thursday, March 29, 2012. Nifty March futures saw contraction of 0.90 million (mn) units taking the total outstanding open interest (OI) to 24.90 mn units.

From the most active contract, DLF March 2012 futures were at a premium of 2.10 point at 201.10 compared with spot closing of 199.00. The number of contracts traded was 19,146.

Tata Steel March 2012 futures were at a premium of 4.05 point at 427.05 compared with spot closing of 423.00. The number of contracts traded was 19,223.

HDIL March 2012 futures were at a premium of 1.20 at 102.50 compared with spot closing of 101.30. The number of contracts traded was 15,707.

Reliance Industries March 2012 futures were at a premium of 5.35 point at 769.35 compared with spot closing of 764.00. The number of contracts traded was 19,180.

ICICI Bank March 2012 futures were at a premium of 8.30 point at 869.75 compared with spot closing of 861.45. The number of contracts traded was 24,124.

Among Nifty calls, 5600 SP from the March month expiry was the most active call with an addition of 0.20 million open interest.

Among Nifty puts, 5200 SP from the March month expiry was the most active put with contraction of 0.71 million open interest.

The maximum OI outstanding for Calls was at 5600 SP (5.13mn) and that for Puts was at 5200 SP (6.82mn).

The respective Support and Resistance levels are: Resistance 5252.38-- Pivot Point 5211.91 -- Support 5179.98.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.17 for March -month contract.

The top five scrips with highest PCR on OI were ABGSHIP 8.90, JP POWER 6.44, SCI 2.05, MARUTI 1.79, and SKUMARSYNF1.63

Among most active underlying, Suzlon witnessed contraction of 0.74 million of Open Interest in the March month futures contract followed by IFCI which witnessed an addition of 2.36 million of Open Interest in the near month contract. Meanwhile, ALOKTEXT witnessed an addition of 0.59 million in the March month futures. Also, LITL witnessed an addition of 0.30 million in Open Interest in the March month contract. Finally, RCOM witnessed contraction of 1.16million of Open Interest in the near month futures contract.