Nifty gives up early gains to close near 4,900 mark amid weakening rupee

After trading firmly with a gain of about a percentage point for most part of the day’s trade, S&P Nifty gave most of its early gains in the late trade to end near its crucial 4,900 mark intense selling in last leg of trade triggered by the rupee moving towards its record lows against the dollar. However, global cues remained supportive as most of the Asian counters ended the session in the green on the comment of Chinese Premier Wen Jiabao that China will focus more on bolstering economic growth. Moreover, European counters were trading largely in the positive terrain at this point of time after a flat start as investors bought into some stocks and sectors that had been particularly hard hit in the previous week’s sell-off. Back home, stellar earnings numbers from State Bank of India and Reliance Capital helped the market to negotiate a positive close.

Earlier, domestic benchmark made a flat start but, immediately got traction and regained its crucial 4,900 mark supported by positive global cues. However, gains remained capped after Planning Commission deputy chairman Montek Singh Ahluwalia said that ailing rupee and high inflation would make it difficult for India to achieve 7.5 percent economic growth during the current financial year. Afterwards, market traded in the tight range till noon trade as market-men weighted for opening in Europe. The sentiments was buoyed by Reliance Anil Dhirubhai Ambani (ADA) group stocks, which rose across the board after group firm Reliance Capital on Saturday, reported turnaround Q4 results. Reliance Capital has more than trebled its standalone net profit to Rs 356.14 crore for the quarter ended March 31, 2012, up by 216.94% as compared to Rs 112.37 crore for the quarter ended March 31, 2011. Market added some more gains as European market got some traction after a flat opening. But, it was the last leg of trade where market lost its grip and witnessed a steep fall of about 40 points as selling emerged after the rupee touched an intra-day low of 54.88 points against the dollar during market hours, raising concerns over slowing economic growth and a widening budgetary deficit. Finally, Nifty ended the day’s trade with a marginal gain of 0.30 percent, giving up most of its early gains.

Meanwhile, most of the sectoral indices on the NSE were settled in the green, CNX PSU Bank remained the major gainer, up 2.47% followed by CNX Realty up 2.12% and CNX Infra up by 1.52% while CNX FMCG and CNX IT declined 1.43% and 1.17% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 1.57% and reached 23.92.

The India VIX witnessed an addition of 1.57% at 23.92 as compared to its previous close of at 23.55 on Friday.

The 50-share S&P CNX Nifty gain 14.60 points or 0.30% to settle at 4906.05.

Nifty May 2012 futures closed at 4,893.90 at a discount of 12.15 points over spot closing of 4,906.05, while Nifty June 2012 futures were at 4911.45 at a premium of 5.40 points over spot closing. The near month May 2012 derivatives contract will expire on Thursday i.e. May 31, 2012. Nifty May futures saw a contraction of 0.34 million (mn) units taking the total outstanding open interest (OI) to 20.42 mn units.

From the most active contract, Tata Motors May 2012 futures were at a premium of 1.65 point at 263.20 compared with spot closing of 261.55. The number of contracts traded was 14,672.

BHEL May 2012 futures were at a premium of 0.20 point at 207.25 compared with spot closing of 207.05. The number of contracts traded was 7,887.

Tata Steel May 2012 futures were at a premium of 0.85 points at 403.45 compared with spot closing of 402.60. The number of contracts traded was 29,752.

ICICI Bank May 2012 futures were at a discount of 14.30 point at 794.20 compared with spot closing of 808.50. The number of contracts traded was 17,758.

Reliance Industries May 2012 futures were at a discount of 8.85 point at 688.15 compared with spot closing of 697.00. The number of contracts traded was 8,917.

Among Nifty calls, 5100 SP from the May month expiry was the most active call with  an addition of 0.19 million open interest.

Among Nifty puts, 4700 SP from the May month expiry was the most active put with contraction of 0.07 million open interest.

The maximum OI outstanding for Calls was at 5100 SP (7.19mn) and that for Puts was at 4700 SP (6.93mn).

The respective Support and Resistance levels are: Resistance 4932.80-- Pivot Point 4910.68--Support 4883.86.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.83 for May -month contract.

The top five scrips with highest PCR on OI were MPHASIS 4.00, Siemens 2.33, Asian Paint 1.44 and Hindunilvr 1.17 and MRPL 1.14

Among the most active underlying, Suzlon witnessed contraction of 5.49 million of Open Interest in the April month futures contract followed by IFCI which witnessed an addition of 0.34 million of Open Interest in the near month contract. Meanwhile, RCOM witnessed contraction of 2.03 million in the April month futures. Also, JP Associates witnessed addition of 0.35 million in Open Interest in the April month contract. Finally, Tata Motors witnessed an addition of 0.23 million of Open Interest in the near month futures contract.