Boisterous bull tighten their grip on market; Nifty shies away from 5,000 mark

Bulls held their control throughout the day’s trade on Wednesday and Nifty ended the remarkable day of trade with 2.75 percent gain recapturing its crucial 4,950 level on hopes that Reserve Bank of India (RBI) would cut interest rates sparked a rally in sectors like infra, autos and banking. Moreover the global cues too remained supportive on hopes that the European Central Bank which meets later today would announce measures to revive the economy in the euro zone. All the Asian equity indices barring Chinese Shanghai ended the trade in the green while; European counters were also trading on a firm note at this point of time. Back home, recovery in rupee too aided the domestic sentiments. The rupee recovered by 16 paise to 55.48 against the US dollar.

Buoyed by firm global cues, Indian equity index made a gap up start, reclaiming 4,900 mark in early trade following overnight gains on the US market driven by positive economic data. Afterwards market continued its northward journey and regained its 4,950 mark in the early noon trade supported by banking stocks, which was spurred by the optimism of rate cut after Reserve Bank of India’s deputy governor, Subir Gokarn, stated that there was ‘elbow room’ to cut interest rates to boost the country’s waning growth. Moreover, infrastructure stocks too gained on reports that India’s Prime Minister Manmohan Singh had called for a meeting of various government officials on June 6, 2012 to discuss ways to kick-start stalled infrastructure projects. In the afternoon trade, market fast tracked its run following firm opening in European counters. In the last leg of trade, market gained its crucial 5,000 mark as sentiments were supported by shares of FMCG companies, which rallied on hopes of good rainfall this year will help increase farm output, which takes up income, improving sales. The prominent gainers from the space were ITC and Hindustan Unilever, up by 3-4 percent. But in the last few minutes of trade, Nifty lost its crucial 5,000 mark on the back of some profit booking and ended the session with a massive 2.75 percent of gain tad below its important 5,000 level.

Meanwhile, all the sectoral indices on the NSE settled in the positive territory with CNX Infra gaining the most, up 3.78% followed by CNX Auto up by 3.69%, CNX PSU Bank up by 3.34% and CNX Metal up by 3.00% in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, tumbled 5.17% and reached 24.90.

The India VIX witnessed contraction of 5.18% at 24.90 as compared to its previous close of at 26.26 on Tuesday.

The 50-share S&P CNX Nifty gain 133.80 by point or 2.75% to settle at 4997.10.

Nifty June 2012 futures closed at 4,978.60 at a discount of 18.50 points over spot closing of 4,997.10, while Nifty July 2012 futures were at 4,995.85 at a discount of 1.25 points over spot closing. The near month June 2012 derivatives contract will expire on Thursday i.e. June 28, 2012. Nifty June futures saw contraction of 0.38 million (mn) units taking the total outstanding open interest (OI) to 15.43 mn units.

From the most active contract, Tata Motors June 2012 futures were at a premium of 1.15 point at 234.80 compared with spot closing of 233.65. The number of contracts traded was 30,570.

DLF June 2012 futures were at a premium of 1.00 point at 189.20 compared with spot closing of 188.20. The number of contracts traded was 8,996.

Tata Steel June 2012 futures were at a discount of 2.05 point at 408.65 compared with spot closing of 410.70. The number of contracts traded was 11,361.

HDFC Bank June 2012 futures were at a discount of 2.50 point at 516.65 compared with spot closing of 519.15. The number of contracts traded was 11,615.

ICICI Bank June 2012 futures were at a premium of 1.45 point at 809.95 compared with spot closing of 808.50. The number of contracts traded was 20,018. 

Among Nifty calls, 5000 SP from the Jun month expiry was the most active call with contraction of 0.13 million open interest.

Among Nifty puts, 4800 SP from the Jun month expiry was the most active put with an addition of 1.63 million open interest.

The maximum OI outstanding for Calls was at 5000 SP (5.24 mn) and that for Puts was at 4800 SP (7.36 mn).

The respective Support and Resistance levels are: Resistance 5042.98-- Pivot Point 4964.56--Support 4918.68.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.53 for Jun -month contract.

The top five scrips with highest PCR on OI were ABG Ship 7.33, Central Bank 1.50, LT 1.28, Fortis 1.25, and HDFC Bank 1.10.

Among the most active underlying, Suzlon witnessed an addition of 21.61 million of Open Interest in the June month futures contract followed by LITL which witnessed an addition of 4.71 million of Open Interest in the near month contract. Meanwhile, IFCI witnessed an addition of 0.81 million in the June month futures. Also, RCOM witnessed an addition of 0.10 million in Open Interest in the June month contract. Finally, Tata Motors witnessed contraction of 3.14 million of Open Interest in the near month futures contract.