Nifty garners decent gains; regain 5,450 level

The local benchmark, Nifty has garnered decent gains of over a percent on Friday. Moreover, market traded superbly throughout the session and ended comfortably over its crucial 5,450 mark. Earlier, the local index made a decent start extended its gains in early trade tracking positive cues from across the globe and good earnings report on domestic front. Trade remained firm till late morning led by sustained buying witnessed in most of the key heavyweights and broader indices too witnessed a strong grip in the trade. Moreover, PSU oil marketing companies viz, BPCL, HPCL and IOC gained in the range of 0.50-1.50 percent as crude oil prices declined below $100 per barrel while, Fertilizers stocks like Chambal Fertilisers & Chemicals, National Fertilizers and Rashtriya Chemicals & Fertilizers surged in the range 0.50-2.50 percent on report that fertiliser companies may be allowed to hike maximum retail prices of DAP by over Rs 600 per tonne. Afterwards, market pared some of its gains in early noon trade as many Asian markets reversed their initial gains while, reports of hike in subsidy burden for upstream companies by the Government too weighed the sentiments. Upstream companies like ONGC, OIL and GAIL slipped as they will have to pay around Rs 24,892  crore, Rs 3,293 crore and Rs 2,111 crore, respectively of the total subsidy burden of 78,000 crore. Afterwards, market again started its northward journey and crossed its crucial 5,500 mark for a while in the mid afternoon trade, but profit booking during the last leg of the day dragged the index below 5,500 mark after FMCG major ITC reported flattish quarterly earnings and IRB Infra too disappointed the street. Finally, Nifty snapped the day’s trade with a gain of over a percent.

On the global front, the US markets extended their gains on Thursday supported by decline in crude oil prices, while  Asian equity indices finished the day’s trade on a mixed note. However, all the European counterparts were trading in the positive terrain 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 surged the most, ending with a gain of over two percent followed by Bank Nifty, CNX Infra and CNX Realty. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 4.70% and reached 19.45, while S&P Nifty moved higher by 58.25 points to close at 5,486.35. The markets registered volumes of over Rs 1.58 lakh crore which remained on the higher side compared to Thursday.

The India VIX was down by 4.70% at 19.45 on Friday as compared to its previous close of 20.41 on Thursday.  

The 50-share S&P CNX Nifty gained 58.25 points or 1.07% settled at 5,486.35.

Nifty May 2011 futures closed at 5,479.00, at a discount of 7.35 points over spot closing of 5,486.35, while Nifty June 2011 futures were at 5,487.70 at a premium of 1.35 points over spot closing. The near month May 2011 derivatives contract expires on Thursday, May 26, 2011. Nifty May futures saw addition of 5.28% or 1.34 million (mn) units, taking the total outstanding open interest (OI) to 26.78 mn units.

From the most active underlying, L&T May 2011 futures closed at a premium of 2.00 points at 1658.00 compared with spot closing of 1656.00. The number of contracts traded was 41,794.

ITC May 2011 futures were at a discount of 0.60 point at 186.10 compared with spot closing of 186.70. The number of contracts traded was 21,577.

SBI’s May 2011 futures were at a premium of 5.80 points at 2323.80 compared with spot closing of 2318.00. The number of contracts traded was 26,511.

Tata Steel May 2011 futures were at a premium of 0.35 points at 580.35 compared with spot closing of 580.00. The number of contracts traded was 18,979.

Tata Motors May 2011 futures were at a premium of 1.75 points at 1166.50 compared with spot closing of 1164.75. The number of contracts traded was 17,175.

For Nifty calls, 5500 strike price (SP) from the May series was the most active call with a contraction of 1.17 million or 14.58%.

Among Nifty puts, 5400 SP from the May month expiry was the most active put with an addition of 0.76 million or 9.56%.

The maximum Call OI outstanding was at 5500 SP (6.85) and that for Puts at 5400 SP (8.72).

The respective Support and Resistance levels are: Resistance 5525.01-- Pivot Point 5478.88-- Support 5440.21.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.74 for May-month contracts.

The top five scrips with highest PCR on OI were BRFL 1.64, Ranbaxy 1.45, Grasim 1.38, Hero Honda 1.36 and Mphasis 1.25.

Among most active underlying L&T witnessed a contraction of 2.11% in the May month futures contract, followed by SBI which too saw decline of 0.78% of Open Interest (OI) in the near month contract. Meanwhile, ITC witnessed an addition of 50.61% in this month futures coupled with Tata Steel which added 0.53% in the May month future contract. Lastly, Reliance Industries (RIL) too saw a contraction of 0.67% in its OI in the May month futures contract