Firm global cues pulls market higher; Nifty regains 5,600 mark

The local benchmark, Nifty witnessed an exceptional day of trade on Friday and regained its crucial 5,600 level after surging over one and a half percent. However, the domestic index witnessed a terrific run throughout the day’s trade and ended the session near its intraday high. Earlier, the Indian market opened on a firm note and extended its initial gains in the latter trade, led by worldwide rally after European Union leaders announced a new rescue package for Greece. The report that US President Barack Obama is in process to reach an agreement with the House Republicans on the debt ceiling issue too supported the sentiments. The index continued its north ward journey and crossed the crucial 5600 mark in the mid morning trade as buying was witnessed in all the key heavyweights along with broader indices. The surge of around one and half a percent in index heavyweight Reliance Industries too buttressed the benchmarks. Meanwhile, textile stocks viz., Alok Industries and Grasim Industries ended with decent gains on the buzz that the government is mulling to allow additional export of 8 lakh bales of cotton. The government had on June 8 allowed the export of 10 lakh bales of 170 kg each beyond the earlier ceiling of 55 lakh bales for the current cotton season (October 2010-September 2011). In last half an hour of trade, market witnessed a sharp spike up of about 20 points, led by strong gains in heavyweights like Larsen & Toubro, SBI, Bharti Airtel and RIL.  Finally, Nifty snapped the day’s trade near its intraday high with a gain of over 90 points.

On the global front, the US markets made a good bounce back on Thursday on sign that European leaders are getting closer to agreeing on a broad approach to deal with the region's debt troubles while, all the Asian equity indices barring KLSE Composite finished the day’s trade in the positive terrain after euro-zone leaders finally struck a second bailout deal for Greece that also puts in place steps to avoid contagion in other struggling economies. All the European counterparts were trading on a positive note where major indices like CAC, DAX and FTSE were trading with a gain of about a percent at this point of time. Back home, broad based buying supported all sectoral indices on the NSE to settle in the positive territory with Bank Nifty surging the most and ending with a gain of 2.31% followed by CNX PSU Bank up 2.11% and CNX Services up 1.03%. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 4.48% and reached 17.91, while S&P Nifty moved higher by 92.35 points or 1.67% to close at 5,633.95.

The India VIX witnessed a decline of 4.48% at 17.91 on Friday as compared to its previous close 18.75 on Thursday

The 50-share S&P CNX Nifty surged 92.35 points or 1.67% and settled at 5,633.95.

Nifty July 2011 futures closed at 5,641.60, at a premium of 7.65 point over spot closing of 5,633.95, while Nifty August 2011 futures were at 5,660.50 at a premium of 26.55 points over spot closing. The near month July 2011 derivatives contract expires on Thursday, 28 July, 2011. Nifty July futures saw an addition of 10.31% or 2.12 million (mn) units, taking the total outstanding open interest (OI) to 22.77 mn units.

From the most active contract by contract value, Axis Bank July 2011 futures closed at a premium of 1.40 points at 1297.40 compared with spot closing of 1296.00. The number of contracts traded was 28,382.

SBI’s July 2011 futures were at a discount of 0.60 point at 2495.95 compared with spot closing of 2496.55. The number of contracts traded was 19,783.

Petronet LNG July 2011 futures were at a discount of 2.55 at 173.85 compared with spot closing of 176.40. The number of contracts traded was 14,482.

Infosys July 2011 futures were at a discount of 0.90 at 2819.10 compared with spot closing of 2820.00. The number of contracts traded was 13,723.

Praj Industries July 2011 futures were at a premium of 0.40 at 93.90 compared with spot closing of 93.50. The number of contracts traded was 13,485.   Among Nifty calls, 5600 SP from the July month expiry was the most active call with a decline of 3.24 million or 33.55%.

Among Nifty puts, 5600 SP from the July month expiry was the most active put with  an addition of 2.81 million or 44.59%.

The maximum Call OI outstanding for Calls was at 5600 SP (6.42 mn) and that for Puts was at 5500 SP (9.13 mn).

The respective Support and Resistance levels are: Resistance 5661.7333 -- Pivot Point 5614.4167 -- Support 5586.6333.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.21 for July month contract.

Among most active underlying, SunPharma witnessed an addition of 2.76% of Open Interest (OI) in the July month futures contract followed by Asian Paints witnessed an addition of 2.00% of Open Interest (OI) in the near month contract. Meanwhile MRF coupled with Punjab national Bank witnessed an addition of 2.00% and 1.96% respectively of OI in the July month futures respectively. Lastly, Jain Irrigation System witnessed an addition of 1.67% of Open Interest (OI) in the July month futures.