Nifty witnesses pull back rally; surpasses 5,550 mark

The local benchmark, Nifty recovered exceptionally well on Wednesday after the last sessions’ deep fall and snapped the day’s trade with a gain of over a percent, near its crucial 5,600 level on the back of firm Asian counterparts. Earlier, the equity market made a positive start tracking firm cues from Asian equity indices and crossed its crucial 5,550 mark in initial trade while, gains in PSU oil marketing companies viz; Bharat Petroleum Corporation, Hindustan Petroleum Corporation and Indian Oil Corporation in the early trade on the back of further decline in global crude prices too aided the sentiments. In the mid morning trade, market pared some of its initial gains due to profit booking witnessed in blue-chip stocks on worries over global jitters. Afterwards, benchmark regained its strength and moved upward. The local index traded range bound as European counterparts came back in the green after a cautious start. In the mid afternoon trade, market again witnessed a downfall on the back of profit booking. But, it was the last half an hour of trade where market changed its gear and started its upward move. Meanwhile, Sugar stocks witnessed a good run in the trade on the back of fears of a shrinking cane crop from the world's biggest sugar producer, Brazil. Stocks like Bajaj Hindusthan, Shree Renuka Sugars, Balrampur Chini Mills, Triveni Engineering & Industries and Rana Sugars all rallied in the range of 1-5 percent in the trade. Moreover, some of the tea stocks like Tata Global, Assam Company and Bombay Burmah also added notable gains. Finally, Nifty snapped the day’s trade near its intraday high with a gain of over a percentage point led by strong gains in heavyweights like ONGC, Bharti Airtel and Reliance Industries.

On the global front, the US markets fell further on Tuesday as the worries of euro zone aggravated after the ratings agency Moody’s downgraded Ireland's government bonds to junk status shortly before the market close. However, All the Asian equity indices barring Taiwan Weighted finished their day’s trade in the positive terrain on Wednesday on the back of better-than-expected Chinese economic growth data. 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 most of the sectoral indices on the NSE to settle in the positive territory with CNX Realty surging the most and ending with a gain of 1.12% followed by CNX Infra up 1.11%, Bank Nifty up 1.09% while, CNX IT down by 0.11% in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 6.28% and reached 19.52, while S&P Nifty moved higher by 59.30 points or 1.07% to close at 5,585.45.

The India VIX witnessed a drop of 6.28% at 19.52 on Wednesday as compared to its previous close of 20.83 on Tuesday.  

The 50-share S&P CNX Nifty gain 59.30 points or 1.07% and settled at 5,585.45.

Nifty July 2011 futures closed at 5,608.25, at a premium of 22.80 point over spot closing of 5,585.45, while Nifty August 2011 futures were at 5,625.75 at a premium of 40.30 points over spot closing. The near month July 2011 derivatives contract expires on Thursday, 28 July, 2011. Nifty July futures saw an addition of 1.08% or 0.24 million (mn) units, taking the total outstanding open interest (OI) to 22.95 mn units.

From the most active underlying, SBI’s July 2011 futures closed at a premium of 12.05 points at 2445.80 compared with spot closing of 2433.75. The number of contracts traded was 17,824.

Infosys July 2011 futures were at a premium of 13.15 point at 2791.15 compared with spot closing of 2778.00. The number of contracts traded was 12,885.

RIL July 2011 futures were at a premium of 3.40 at 871.00 compared with spot closing of 867.60. The number of contracts traded was 19,083.

TCS July 2011 futures were at a premium of 5.00 at 1158.00 compared with spot closing of 1153.00. The number of contracts traded was 12,965.

Tata Steel July 2011 futures were at a premium of 2.20 at 577.70 compared with spot closing of 575.50. The number of contracts traded was 12,852.

Among Nifty calls, 5600 SP from the July month expiry was the most active call with addition of 0.009 million or 0.15%.

Among Nifty puts, 5500 SP from the July month expiry was the most active put with addition of 1.68 million or 19.92%.

The maximum Call OI outstanding for Calls was at 5600 SP (6.32 mn) and that for Puts was at 5500 SP (10.13 mn).

The respective Support and Resistance levels are: Resistance 5607.26 -- Pivot Point 5574.33 -- Support 5552.51.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.15 for July -month contract.

The top five scrips with highest PCR on OI were Sun Pharma 5.50, PNB 3.44, Voltas 2.00, Kotak Bank 1.47 and Sun TV 1.19.

Among most active underlying, RIL witnessed an addition of 1.03% of Open Interest (OI) in the July month futures contract followed by Infosys witnessed an addition of 8.06% of Open Interest (OI) in the near month contract. Meanwhile SBI witnessed an addition of 2.39% of OI in the July month futures.