Nifty witnesses consolidation ahead of F&O expiry week; Rupee recovers

After a massive rally of nearly two percent in yesterday’s trade, the domestic index Nifty witnessed consolidation on Friday as investors remained on the sideline ahead of F&O expiry week. Moreover, investors remained concerned that the government may announce a partial rollback of the petrol price hike and delay a hike in diesel and LPG prices. On the global front, most of the Asian equity indices snapped the day’s trade in negative terrain on last trading day of the week amid fears that Greece may leave the euro zone moreover; slowing Chinese economic growth too dampened the regional sentiments. Chinese Shanghai Composite ended lower by 0.74% after the nation’s economic growth dipped at about three-year low of 8.1% in the first quarter. However, European shares rallied further in early trade on Friday after stinging losses earlier in the week, led by a rebound in banking stocks. Back home, marginal appreciation witnessed in the rupee against the US dollar. The rupee traded at 55.41/42 per dollar, recovering sharply from the day’s low of 56.09.

Earlier, the sentiments once again turned bearish after smart relief rally in previous session and local benchmark made a soft start tracking downtrend in the rupee and weak global cues. Afterwards, the market breached its crucial 4,900 mark as sentiments got hammered after PSU oil marketing companies like BPCL, HPCL and IOC edged lower in the initial trades on talk of some roll back in the price hike, on reports that the government may reconsider up to 50 percent cut, which would be a setback for OMCs. But, from the late morning trade, market started recovering from its lower levels tracking recovery in the Indian Rupee as its appreciated to 55.40 from day’s low of 56.09 per dollar. Moreover, positive opening in the European counters too supported the sentiments and market recaptured its green terrain gaining its crucial 4,900 mark back. Meanwhile, Telecom stocks traded with traction after Telecom Commission decided to provide more spectrum and ease the rollout obligations in the upcoming 2G spectrum auction. In the final hour of trade, market remained volatile and ended on the flat note as investors remained away from taking positions in equities ahead of F&O expiry week and Q4 GDP data to be released on May 31, 2012.

Meanwhile, most of the sectoral indices on the NSE were settled in the green, CNX PSU Bank remained the major gainer, up 1.12% followed by CNX Infra up 0.86% and CNX Metal up by 0.85% while CNX FMCG and CNX Auto declined 0.39% and 0.24% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 1.37% and reached 25.14.

The 50-share S&P CNX Nifty declined marginally by 1 point or 0.02% to settle at 4,920.40.

The India VIX witnessed a decline of 1.37% at 25.14 as compared to its previous close of at 25.49 on Thursday.

Nifty May 2012 futures closed at 4,918.85 at a discount of 1.55 points over spot closing of 4,920.40, while Nifty June 2012 futures were at 4,929.40 at a premium of 9 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 0.35 million (mn) units taking the total outstanding open interest (OI) to 18.89 mn units.

From the most active contract, Tata Motors May 2012 futures were at a premium of 1.35 point at 270.15 compared with spot closing of 268.80. The number of contracts traded was 12,897.

Tata Steel May 2012 futures were at a discount of 1.85 point at 407.40 compared with spot closing of 409.25. The number of contracts traded was 14,614.

ITC May 2012 futures were at a premium of 0.25 points at 232.25 compared with spot closing of 232.00. The number of contracts traded was 12,036.

BHEL May 2012 futures were at a discount of 0.20 point at 208.95 compared with spot closing of 208.70. The number of contracts traded was 13,843.

ICICI Bank May 2012 futures were at a discount of 16.80 point at 799.90 compared with spot closing of 816.70. The number of contracts traded was 19,832.

Among Nifty calls, 5000 SP from the May month expiry was the most active call with an addition of 0.18 million open interest.

Among Nifty puts, 4700 SP from the May month expiry was the most active put with a decline of 0.04 million open interest.

The maximum OI outstanding for Calls was at 5000 SP (6.85 mn) and that for Puts was at 4700 SP (9.37mn).

The respective Support and Resistance levels are: Resistance 4941.01-- Pivot Point 4915.18--Support 4894.56.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.9 for May-month contract.

The top five scrips with highest PCR on OI were ABG Shiyard 46.00, Welspun Corp 6.6, Tata Communication 2.00, Asian Paints 1.8, and MPHASIS 1.50.

Among the most active underlying, JP Associates witnessed an addition of 0.28 million of Open Interest in the April month futures contract followed by Tata Motors which witnessed a contraction of 0.06 million of Open Interest in the near month contract. Meanwhile, BHEL witnessed contraction of 0.27 million in the April month futures. Also, Tata Steel witnessed contraction of 0.27 million in Open Interest in the April month contract. Finally, DLF witnessed contraction of 2.80 million of Open Interest in the near month futures contract