Nifty continues jubilant trade for third consecutive day

Sentiment remained bullish for third consecutive day with Nifty recapturing 5,350 mark on Tuesday helped by Bharat Heavy Electricals (BHEL) after positive provisional earnings, while banking stocks rose on growing expectations of a rate cut from the Reserve bank of India (RBI) during its mid-April meeting. The prominent gainers from the pack were State Bank of India (SBI), Axis Bank and ICICI Bank. On the global front, the US markets extended their jubilation on the first trading day of the new quarter supported by domestic manufacturing data that continued to improve last month while, most of the Asian equity indices ended in the green with Hong Kong stocks rebounded after a four-day losing streak as strength in the Chinese property sector after several leading developers reported rising sales figures in March from the month before. Moreover, European Counterparts were trading in the red after a flat-to-positive opening.

Back home, the market edged higher to hit its highest level in more than 1-1/2 weeks in early trade tracing positive global cues. The sentiment was also supported by banking stocks which rose on growing expectations of a rate cut from RBI. Meanwhile, the market regulator SEBI has allowed listing of local stock exchanges, subject to a few conditions, rejecting a significant recommendation of the Jalan Committee report. The market held firm in early afternoon trade as Aviation stocks too aided the investors’ sentiments. Stocks of Spicejet, Kingfisher and Jet Airways surged after the airlines filed application with the Director General of Foreign Trade (DGFT) seeking permission to directly import aviation turbine fuel (ATF). Firmness continued n afternoon trade and market extended gains to hit its intraday high in mid-afternoon trade. But, a bout of volatility was witnessed in late trade as key benchmark trimmed intraday gains and breached its crucial 5,350 mark as European stocks reversed initial gains. In the final hour of trade, market regained the important 5,350 level as sentiments supported by media stocks including NDTV, Network 18, etc which witnessed hasty spurt after investors reacted immediately to reports that government may clear FDI cap in broadcasting services and increase the limit to 74 percent from current 49 percent. Finally, Nifty snapped the day’s trade with a gain of 40 points. However, the upside remained capped as bond yields spurt after traders dumped bonds to make way for the heaviest weekly debt supply totaling $3.54 billion in the holiday-shortened week. The government is set to sell Rs 30 billion each of 8.97% 2030 bonds and 8.83% 2041 bonds; Rs 80 billion of 9.15% 2024 bonds and Rs 40 billion of 8.19% 2020 bonds respectively.

Meanwhile, most of the sectoral indices on the NSE were settled in the green, CNX Media remained the major gainer, up 2.46% followed by CNX Metal up 1.64% and CNX PSE up by 1.43% while CNX Pharma and CNX Auto declined 0.51% and 0.15% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 4.16% and reached 20.01.

The India VIX witnessed contraction of 4.16% at 20.01 as compared to its previous close of at 20.88 on Monday.

The 50-share S&P CNX Nifty gain 40.60 points or 0.76% to settle at 5,358.50

Nifty April 2012 futures closed at 5,383.25 at a premium of 24.75 points over spot closing of 5,358.50, while Nifty May 2012 futures were at 5,417.10 at a premium of 58.60 points over spot closing. The near month April 2012 derivatives contract will expire on Thursday i.e. April 26, 2012. Nifty April futures saw contraction of 0.09 million (mn) units taking the total outstanding open interest (OI) to 18.90 mn units.

From the most active contract, Tata Motors April 2012 futures were at a premium of 0.20 point at 281.70 compared with spot closing of 281.50. The number of contracts traded was 9,356.

JP Associates April 2012 futures were at a premium of 0.15 point at 88.85 compared with spot closing of 88.70. The number of contracts traded was 8,377.

HDIL April 2012 futures were at a premium of 0.55 points at 87.85 compared with spot closing of 87.30. The number of contracts traded was 7,998.

BHEL April 2012 futures were at a premium of 0.50 point at 264.20 compared with spot closing of 263.70. The number of contracts traded was 15,676.

Pantaloon Retail April 2012 futures were at a premium of 0.80 point at 169.30 compared with spot closing of 168.50. The number of contracts traded was 14,200.

Among Nifty calls, 5600 SP from the April month expiry was the most active call with an addition of 0.22 million open interest.

Among Nifty puts, 5000 SP from the April month expiry was the most active put with contraction of 0.11 million open interest.

The maximum OI outstanding for Calls was at 5600 SP (4.25mn) and that for Puts was at 5000 SP (5.13mn).

The respective Support and Resistance levels are: Resistance 5376.68-- Pivot Point 5360.56 -- Support 5342.38.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.30 for April -month contract.

The top five scrips with highest PCR on OI were Hindustan Zinc 6.00, ABG Ship 3.94, ITC 1.28, Grasim 1.25, and Coal India 1.24

Among most active underlying, Suzlon witnessed an addition of 5.04 million of Open Interest in the April month futures contract followed by IFCI which witnessed an addition of 0.07 million of Open Interest in the near month contract. Meanwhile, R COM witnessed contraction of 0.56 million in the April month futures. Also, JP Associates Infra witnessed contraction of 2.94 million in Open Interest in the April month contract. Finally Tata Motors witnessed contraction of 0.16 million of Open Interest in the near month futures contract.