Bulls take control over the market; Nifty reclaims 5,350 mark

Bulls hold their control throughout the day’s trade on Wednesday and Nifty ended remarkable day of trade with 1.70 percent gains recapturing its crucial 5,350 level as broad based buying amongst realty, infra, banking and software stocks led the firm rally. Short covering and somewhat value based buying helped the market rally. Globally, the US markets closed lower overnight on signs of a slowing Chinese economy while, the other Asian markets like Hang Seng and Nikkei ended with marginal losses while Shanghai and Taiwan closed with modest gains. Moreover, European counters opened on a firm note after three days of continuous fall.

Earlier, key benchmark immediately turned in the red after making a flat opening tracking soft global cues. Afterwards, market traded in the tight band near its neutral lines till late morning session due to lack of positive trigger in the market. In the early noon trade, market gradually started gaining strength as traders opted for short-covering in fundamentally strong stocks. Meanwhile, Satyam will be merged into Tech Mahindra with effect from April 1, 2011. The entity will form the sixth largest IT services company. Swap ratio: Satyam's shareholders will get one share of Tech Mahindra for every 8.5 shares held. Mahindra group will hold 26.3% and British Telecom will hold 12.8% in the merged entity. Afterwards, the index continued to extend its gains led by buying in software and banking stocks. Meanwhile, shares of cement manufacturers such Jaiprakash Associates, Ambuja Cement and ACC ended higher in trade today on back of huge volumes. Most of the cement companies had announced a price hike of Rs 7-10 per bag of 50 kg with effect from March 17, after the finance minister announced hike in excise duty. After that, northward journey continued in the mid morning trade as firm opening in European markets too aided the sentiments and Nifty ended the day’s trade near its intraday high garnering a gain of 1.70 percentage point.

Meanwhile, all the sectoral indices on the NSE settled in the positive territory with CNX Realty gaining the most, up 3.64% followed by CNX Infra up by 2.83%, Bank Nifty up by 2.36% and CNX PSU Bank up by 2.21% in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, tumbled 4.28% and reached 21.00.

The India VIX witnessed contraction of 4.28% at 21.00 as compared to its previous close of at 21.94 on Tuesday.

The 50-share S&P CNX Nifty gain 90.10 points or 1.71% to settle at 5364.95.

Nifty March 2012 futures closed at 5,394.50 at a premium of 29.55 points over spot closing of 5,364.95, while Nifty April 2012 futures were at 5,438.55 at a premium of 73.60 points over spot closing. The near month March 2012 derivatives contract expires on Thursday, March 29, 2012. Nifty March futures saw contraction of 0.60 million (mn) units taking the total outstanding open interest (OI) to 25.29 mn units.

From the most active contract, Tata Motors March 2012 futures were at a premium of 2.55 point at 277.75 compared with spot closing of 275.20. The number of contracts traded was 22,106.

HDIL March 2012 futures were at a premium of 0.55 point at 102.70 compared with spot closing of 102.15. The number of contracts traded was 17,234.

Tata Steel March 2012 futures were at a premium of 0.75 at 474.35 compared with spot closing of 473.60. The number of contracts traded was 19,184.

Reliance Industries March 2012 futures were at a premium of 4.50 point at 773.45 compared with spot closing of 768.95. The number of contracts traded was 14,048.

ICICI Bank March 2012 futures were at a premium of 2.75 point at 941.00 compared with spot closing of 938.25. The number of contracts traded was 18,821. 

Among Nifty calls, 5500 SP from the March month expiry was the most active call with contraction of 0.61 million open interest.

Among Nifty puts, 5200 SP from the March month expiry was the most active put with an addition of 0.02 million open interest.

The maximum OI outstanding for Calls was at 5500 SP (6.14mn) and that for Puts was at 5200 SP (7.88mn).

The respective Support and Resistance levels are: Resistance 5406.2-- Pivot Point 5331.1 -- Support 5289.85.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.19 for March -month contract.

The top five scrips with highest PCR on OI were GE Ship 13.50, ABG Ship 8.70, IOB 8.33, JP Power 4.86, and Dr Reddy 2.63

Among most active underlying, Suzlon witnessed an addition of 0.95 million of Open Interest in the March month futures contract followed by IFCI which witnessed an addition of 0.52 million of Open Interest in the near month contract. Meanwhile, Alok Industries witnessed contraction of 17.62 million in the March month futures. Also, LITL witnessed an addition of 0.92 million in Open Interest in the March month contract. Finally, Jaiprakash Associates witnessed an addition of 0.96 million of Open Interest in the near month futures contract.