Sentiments turn bullish on rate cut hopes; Nifty recaptures 5,250 mark

Sentiments turned bullish on Thursday’s trade and Nifty ended the session with a gain of 50 points reclaiming 5,250 mark led by banking stocks on hopes that the RBI, in its monetary policy that schedule to be announced on April 17, may cut repo rates by 25 basis points. The global cues too remained supportive as the US markets recovered overnight, rebounding from five consecutive days of fall while, most of the Asian equity indices snapped the day’s trade in the positive terrain. Back home, metal and banking stocks remained on the investor’s radar while, the aviation sectors got some damage post Cabinet deferring aviation FDI decision to next week.

The benchmark index started off trade on an upbeat note triggered by favourable sentiments from global markets. The bourses held on to gains all throughout the day amidst erratic movements. Although, a weak February IIP data almost threatened the market sentiment, the benchmark indices did not seem to be bogged down for long, as buying continued across most sectors. The growth in February industrial production has come in at 4.10 percent, which is an improvement over the January number but lower than market expectation of 6 percent. The index touched its intraday high in the noon trade as sentiments were boosted by the positive trend in Asian markets and optimism about RBI slashing key policy rates at its monetary policy review on April 17. Moreover, March inflation data, which is expected to slow down marginally from 6.95 percent in February, will also be eyed by traders in order to get further cues on RBI’s stance in its Annual monetary policy review. In the mid noon trade the local benchmark trimmed some of its gains following subdued cues from European counters moreover; the sentiments were also hurt post Cabinet deferring aviation FDI decision to next week thus, aviation stocks like Spicejet, Kingfisher Airlines and Jet Air India declined by 2-3 percent. The fall in technology stocks ahead of Infosys’ quarterly earnings too dampened the sentiments. But, in the final hour of trade, market regained its strength led by index heavyweight Reliance Industries and FMCG major ITC. Finally, Nifty ended the session with a gain of about a percentage point.

Meanwhile, most of the sectoral indices on the NSE were settled in the green, CNX Metal remained the major gainer, up 2.54% followed by CNX PSU Bank up 2.40% and Bank Nifty up by 1.83% while CNX IT and CNX Media declined 1.09% and 0.35% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 2.28% and reached 21.78.

The India VIX witnessed contraction of 2.28% at 21.78 as compared to its previous close of at 22.29 on Wednesday.

The 50-share S&P CNX Nifty gain 50.00 points or 0.96% to settle at 5,276.85.

Nifty April 2012 futures closed at 5,290.65 at a premium of 13.80 points over spot closing of 5,276.85, while Nifty May 2012 futures were at 5,325.90 at a premium of 49.05 points over spot closing. The near month April 2012 derivatives contract will expire on Thursday i.e. April 26, 2012. Nifty April futures saw an addition of 0.08 million (mn) units taking the total outstanding open interest (OI) to 17.13 mn units.

From the most active contract, HDIL April 2012 futures were at a premium of 0.35 point at 83.35 compared with spot closing of 83.00. The number of contracts traded was 13,099.

DLF April 2012 futures were at a premium of 0.90 point at 199.90 compared with spot closing of 199.00. The number of contracts traded was 8,814.

Tata Steel April 2012 futures were at a premium of 1.90 points at 454.00 compared with spot closing of 452.10. The number of contracts traded was 12,209.

Reliance Industries April 2012 futures were at a premium of 3.10 point at 745.20 compared with spot closing of 742.10. The number of contracts traded was 11,135.

ICICI Bank April 2012 futures were at a premium of 4.85 point at 882.35 compared with spot closing of 877.50. The number of contracts traded was 17,815. 

Among Nifty calls, 5500 SP from the April month expiry was the most active call with an addition of 0.34 million open interest.

Among Nifty puts, 5200 SP from the April month expiry was the most active put with an addition of 0.96 million open interest.

The maximum OI outstanding for Calls was at 5500 SP (5.35mn) and that for Puts was at 5200 SP (6.72mn).

The respective Support and Resistance levels are: Resistance 5296.05-- Pivot Point 5271.4 -- Support 5252.2

The Nifty Put Call Ratio (PCR) OI wise stood at 1.25 for April -month contract.

The top five scrips with highest PCR on OI were ABG Ship 3.71, Apil 3.00, Siemens 2.44, Hindustan Zinc 2.00, and Polaris 2.00

Among most active underlying, IFCI witnessed an addition of 0.13 million of Open Interest in the April month futures contract followed by RCOM which witnessed an addition of 1.16 million of Open Interest in the near month contract. Meanwhile, JP Associates Infra witnessed contraction of 0.18 million in the April month futures. Also, IVRCL Infra witnessed contraction of 5.44 million in Open Interest in the April month contract. Finally, witnessed UNITECH witnessed an addition of 0.32 million of Open Interest in the near month futures contract.