Nifty takes cue from firm European markets to cross over crucial 5,600 mark

The local benchmark, Nifty witnessed a good day of trade as the index witnessed decent gains in the second half of the trade on Tuesday as firm European counterparts boosted investors’ sentiment while, buying in index heavyweights like RIL, Infosys, SBI and Bharti Airtel too aided the sentiments. Though, market traded near its neutral line in first half but afterwards it picked up the speed and snapped the trade with a gain of over 0.80 percentage point surpassing its crucial 5,600 mark. Earlier, the Indian equity market made a flat start and dipped into the red in the very initial trade as investors opted to remain on the safer side in the absence of any major trigger. But, selective buying by investors in stocks at attractive levels helped the index to turn green. The benchmark traded near its neutral line till late morning trade. In the early noon session, the local index started its northward journey as European counterparts witnessed some strength in the initial trade. The domestic index picked up pace in the mid noon trade and crossed its crucial 5,600 level supported by buying in index some of the key heavyweights like RIL, Infosys, SBI and Bharti Airtel. Meanwhile, HDFC bank’s net profit for the first quarter increased by 33.66% at Rs 1084.98 crore as compared to Rs 811.71 crore for the corresponding quarter previous year. Market traded confidently till the end and finally Nifty snapped the day’s trade with a gain of over 40 points firmly over its psychological 5,600 mark.

On the global front, the US markets closed lower despite making a bounce back in the late trades as the debt limit debate remained at a standstill while, most of the Asian equity indices finished the day’s trade in the negative terrain tracking weak global cues as the euro-zone debt crisis roared on while lawmakers in Washington remained deadlocked on an agreement to avoid a US default. However, all European counterparts were trading on a positive note where major indices like CAC and DAX were up by about a percent at this point of time. Back home, broad based buying supported all the sectoral indices on the NSE to settle in the positive territory with CNX Realty surging the most and ending with a gain of 1.25% followed by CNX IT up 1.10%, CNX Energy up 1.03% in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 4.70% and reached 19.25, while S&P Nifty moved higher by 46.50 points or 0.84% to close at 5,613.55.

The India VIX witnessed a decline of 4.70% at 19.25 on Tuesday as compared to its previous close of 20.20 on Monday.

The 50-share S&P CNX Nifty gained 46.50 points or 0.84% and settled at 5,613.55.

Nifty July 2011 futures closed at 5,619.00, at a premium of 5.45 point over spot closing of 5,613.55, while Nifty August 2011 futures were at 5,639.35 at a premium of 25.80 points over spot closing. The near month July 2011 derivatives contract expires on Thursday, 28 July, 2011. Nifty July futures saw an addition of 10.74% or 2.27 million (mn) units, taking the total outstanding open interest (OI) to 23.45 mn units.

From the most active contract by contract value, SBI’s July 2011 futures closed at a premium of 8.80 points at 2522.00 compared with spot closing of 2513.20. The number of contracts traded was 20,535.

Tata Motors July 2011 futures were at a premium of 4.00 point at 989.00 compared with spot closing of 985.00. The number of contracts traded was 19,302.

Infosys July 2011 futures were at a premium of 6.80 at 2754.00 compared with spot closing of 2747.20. The number of contracts traded was 12,667.

DLF July 2011 futures were at a discount of 1.15 at 239.15 compared with spot closing of 240.30. The number of contracts traded was 18,397.

Crompton Greaves July 2011 futures were at a premium of 0.90 at 206.30 compared with spot closing of 205.40. The number of contracts traded was 19,089.Among Nifty calls, 5600 SP from the July month expiry was the most active call with decline of 0.67 million or 8.44%.

 Among Nifty puts, 5600 SP from the July month expiry was the most active put with addition of 1.10 million or 16.64%.The maximum Call OI outstanding for Calls was at 5600 SP (7.26 mn) and that for Puts was at 5500 SP (7.79 mn).

The respective Support and Resistance levels are: Resistance 5641.73 -- Pivot Point 5599.46 -- Support 5571.28.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.24 for July month contract.

The top five scrips with highest PCR on OI were Sun Pharma 2.79, Punjab National Bank 1.86%, Sun TV 1.42, Kotak Bank 1.38%, and Wipro 1.37.

Among most active underlying, SBI witnessed an addition of 1.08% of Open Interest (OI) in the July month futures contract followed by Infosys witnessed an addition of 2.59% of Open Interest (OI) in the near month contract. Meanwhile Tata Motors and DLF witnessed an addition of 10.61% and 3.77% of OI in the July month futures respectively. Lastly, HDFC Bank witnessed an addition of 6.05% of Open Interest (OI) in the July month futures.