Bargain-hunting helps Nifty to regain crucial 5,250 mark

After a previous session’s bloodbath, bulls retaliate back snapping the erratic day of trade in a great fashion garnering gains of about a percentage point as investors kept themselves busy in buying beaten down fundamentally strong stocks. However, global cues remained unsupportive as the US markets closed lower overnight after economic data from the euro zone prompted worries of recession and Chinese manufacturing weakened for the fifth month in a row. Moreover, major Asian equity indices like Nikkei, Shanghai and Hang Seng ended the trade in the red terrain but, late hour recovery in other Asian counters provided some boost to domestic benchmark. Back home, technology and rate sensitive’s like banks and realty led the gainers pack helping market to recover from previous session’s slaughter.

After kicking off trade on a solid note radiant in green in early trade on the back of bargain-hunting, the index held their ground for almost an hour, until they witnessed a fall owing to weak global and Asian cues. The market nose-dived into the negative terrain and registered intraday lows following unsupportive global leads. However, the setback was short-lived as the index pared losses and re-entered the positive terrain. Afterwards, the market held on its gains till early noon trade despite erratic movements. After touching its neutral lines in the noon trade, market started its jubilant run and regained its crucial 5,300 mark in mid noon trade following firm opening in European markets. The sentiments also got boost after the investment firm Goldman Sachs in its latest Asia-Pacific Quarterly Outlook report upgraded Indian stocks to market-weight from underweight, citing reasons that the domestic growth is likely to pick up, while stock valuations remain relatively attractive. Besides, at a time when Indian oil and gas companies incurring hefty losses and subsidies burden has shown little signs of coming down, the government initiated gas pricing reforms to incentivize production of natural gas. In the last leg of trade, market started falling from its crucial level at the same time European counters pared their gains and turned red. But, buying in technology, banking and realty stocks helped local index to go home with a gain of about 50 points. Meanwhile, Aviation stocks moved up on report that the civil aviation ministry allowed increasing utilisation of foreign bilateral rights for Indian carriers to 40 percent, roughly equal to the utilisation by foreign carriers, from the summer schedule, starting April. Finally, Nifty snapped the day’s trade with a gain of about a percent comfortably above its important 5,250 mark.

Meanwhile, most of the sectoral indices on the NSE were settled in the green, CNX Realty remained the major gainer, up 1.56% followed by CNX IT up 1.48% and CNX Infra up by 1.26% while CNX Metal declined 0.51% remained the lone loser in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, tumbled 5.77% and reached 23.34.

The India VIX witnessed contraction of 5.77% at 23.34 as compared to its previous close of at 24.77 on Thursday.

The 50-share S&P CNX Nifty gain 49.75 points or 0.95% to settle at 5,278.20.

Nifty March 2012 futures closed at 5,285.35 at a premium of 7.15 points over spot closing of 5,278.20, while Nifty April 2012 futures were at 5,326.40 at a premium of 48.20 points over spot closing. The near month March 2012 derivatives contract expires on Thursday, March 29, 2012. Nifty March futures saw contraction of 1.65 million (mn) units taking the total outstanding open interest (OI) to 22.77 mn units.

From the most active contract, Tata Motors March 2012 futures were at a discount of 0.95 point at 273.20 compared with spot closing of 274.15. The number of contracts traded was 12,237.

HDIL March 2012 futures were at a premium of 0.25 point at 95.90 compared with spot closing of 95.65. The number of contracts traded was 11,963.

Reliance Industries March 2012 futures were at a premium of 0.85 at 745.45 compared with spot closing of 744.60. The number of contracts traded was 18,666.

Tata Steel March 2012 futures were at a discount of 0.45 point at 448.95 compared with spot closing of 449.40. The number of contracts traded was 23,757.

ICICI Bank March 2012 futures were at a discount of 2.40 point at 912.25 compared with spot closing of 914.65. The number of contracts traded was 20,303.

Among Nifty calls, 5500 SP from the March month expiry was the most active call with OI outstanding at 6.84 millions.

Among Nifty puts, 5000 SP from the March month expiry was the most active put with an addition of 0.91 million open interest.

The maximum OI outstanding for Calls was at 5500 SP (6.84mn) and that for Puts was at 5000 SP (8.24mn).

The respective Support and Resistance levels are: Resistance 5320.13-- Pivot Point 5270.06 -- Support 5228.13.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.11 for March -month contract.

The top five scrips with highest PCR on OI were BEML 12.75, IOB 9.00, ABG Ship 8.70, JP power 4.54 and GE Ship 4.50.

Among most active underlying, Suzlon witnessed contraction of 4.95 million of Open Interest in the March month futures contract followed by IFCI which witnessed contraction of 20.63 million of Open Interest in the near month contract. Meanwhile, LITL witnessed contraction of 5.56 million in the March month futures. Also, RCOM Infrastructure witnessed contraction of 3.94 million in Open Interest in the March month contract. Finally, JP Associaties witnessed contraction of 0.27 million of Open Interest in the near month futures contract.