Ease in inflation pulls Nifty over 5,700 mark; witnesses triple digit rally

The local benchmark, Nifty witnessed an exceptional day of trade on Thursday and surpassed its crucial 5,700 level after hitting a triple digit rally. However, benchmark witnessed a terrific run through the day’s trade and garnered gain of about two percent. Initially, the equity market made a positive start tracking supportive cues from global indices and started its northward journey led by increased buying by funds and retail investors, which further strengthened the sentiments. The benchmark continued its jubilant run till end as inflation numbers for the week ended June 25 eased a bit. Primary articles inflation declined marginally to 11.56% versus 11.84% for week; food articles inflation eased to 7.6% versus 7.78% (wow) while fuel group inflation stood at 12.67% versus 12.98% (wow) while, positive opening in European counterparts too supported the sentiments. Meanwhile, Radio operators viz; Next Mediaworks, Reliance Broadcast Network, Entertainment Network India, TV Today Network and HT Media all edged higher in the trade while, BAG Films & Media touched the roof on reports that the union cabinet has approved auctions for the third phase of FM radio privatization from which it expects to raise Rs 1733 crore. Moreover, Birla Pacific Medspa and Rushil Decor, the new listings today got terrific response from traders and closed the day’s trade with a gain of over 65 and 150 percent respectively. Finally, Nifty snapped the day’s trade near its intraday high with a gain of over 100 points led by led by strong gains in heavyweights like Larsen & Tourbo, ITC, Bharti Airtel and RIL.

On the global front, the US markets managed a close of green ahead of crucial jobs data. However, Asian equity indices finished the day’s trade on a mixed note on Thursday, with investors remaining on the safer side after the people’s Bank of China increased its benchmark interest rate, in an effort to curb soaring inflation. All the European counterparts were trading on a positive note where major indices like CAC, DAX and FTSE were up by about half a percent at this point of time. Back home, broad based buying supported all sectoral indices on the NSE to settle in the positive territory with CNX Infra surging the most and ending with a gain of 2.37% followed by CNX Realty up 2.11%, Bank Nifty up 1.27% and CNX IT up by 1.24%. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, rose 1.52% and reached 18.62, while S&P Nifty moved higher by 103.50 points or 1.84% to close at 5,728.95.

The India VIX witnessed a gain of 1.52% at 18.62 on Thursday as compared to its previous close of 18.34 on Wednesday.  

The 50-share S&P CNX Nifty surged 103.50 points or 1.84% and settled at 5,728.95.

Nifty July 2011 futures closed at 5,745.30, at a premium of 16.35 point over spot closing of 5,728.95, while Nifty August 2011 futures were at 5,763.40 at a premium of 34.45 points over spot closing. The near month July 2011 derivatives contract expires on Thursday, 28 July, 2011. Nifty July futures saw an addition of 12.01% or 2.60 million (mn) units, taking the total outstanding open interest (OI) to 24.27 mn units.From the most active underlying, SBI’s July 2011 futures closed at a premium of 0.50 points at 2487.00 compared with spot closing of 2486.50. The number of contracts traded was 22,630.

ICICI Bank July 2011 futures were at a premium of 3.65 point at 1093.65 compared with spot closing of 1090.00. The number of contracts traded was 24,027.

RIL July 2011 futures were at a premium of 6.10 points at 878.00 compared with spot closing of 871.90. The number of contracts traded was 26,030.

L&T July 2011 futures were at a premium of 7.00 at 1867.00 compared with spot closing of 1860.00. The number of contracts traded was 9,632.

Tata Motors July 2011 futures were at a discount of 19.55 at 1035.45 compared with spot closing of 1055.00. The number of contracts traded was 15,515.Among Nifty calls, 5700 SP from the July month expiry was the most active call with decline of 0.60 million or 10.48%.

Among Nifty puts, 5600 SP from the July month expiry was the most active put with addition of 1.89 million or 39.27%.

The maximum Call OI outstanding for Calls was at 5700 SP (5.09 mn) and that for Puts was at 5600 SP (6.72 mn).

The respective Support and Resistance levels are: Resistance 5766.42-- Pivot Point 5699.68 -- Support 5662.22.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.39 for July -month contract.

The top five scrips with highest PCR on OI were Sun Pharma 3.45, Shriram Transport Finance Company 3.0, Jain Irrigation Systems 2.50, Pantaloon Retail (India)  and  Bharat Forge2.00.

Among most active underlying, RIL witnessed an addition of 0.58% of Open Interest (OI) in the July month futures contract followed by SBI witnessed an addition of 3.05% of Open Interest (OI) in the near month contract. Meanwhile ICICI Bank witnessed an addition of 13.79% of OI in the July month futures while Tata Motors witnessed an addition of 1.18% of OI in the July month futures.