Bulls continue to show aggression; Nifty shies away from 5,050 mark

Bulls started their run from where they left yesterday and snapped the session with another gigantic gain of over a percentage point, recapturing its crucial 5,000 mark on the back of firm cues from global peers and on hopes of a rate cut by the Reserve Bank of India (RBI) in its imminent meeting. Additionally, global cues too shored up the momentum as concern over euro-zone looking to be eased after policymakers in Europe were taking urgent action to help stem Spain’s banking crisis and that the United States might embark on monetary stimulus. Furthermore, Asian markets mostly rose for a third successive day on Thursday, posting strong gains on hopes for stimulus measures. Back home, the rupee appreciated by 34 paise to 55.02 as against the US dollar as hope for US monetary stimulus pushed up global risk assets, but fell short of breaching the 55 mark as mild greenback sales by a few custodian banks were absorbed by oil companies.

Triggered by firm global cues, Indian equity index made a gap-up start, reclaiming 5,000 mark in early trade following rally across the globe. The gaining momentum extended afterward aided by banking shares, which enlarged yesterday’s gain on hopes of a rate cut by the RBI in the upcoming policy review which is scheduled to be announced on June 18, 2012. However, market pared most of their gains but, stayed well above the equator in late morning session as the Union Cabinet deferred the decision on Pension Bill, in a setback to reform measures. Moreover, no fireworks was seen from most awaited AGM of Reliance Industries as the Chairman highlighted the business investment in retail and said that the company is reinvesting cash flows in new projects, which will fuel growth over the next few years. But, the benchmark regained its strength in the noon session tracing firm opening in European counters. Afterwards, market traded with great strength and recaptured its important 5,050 level as sentiments remained buoyed by infrastructure stocks surge after Prime Minister, in a bid to revert back to 9% economic growth, earmarked Rs 2 lakh crore investment targets for core sector projects in the current fiscal. Meanwhile, shares of FMCG companies extended the rally on hopes of good rainfall this year will help increase farm output, which will help increase income, thereby boosting sales. Finally Nifty ended the session with an enormous gain of over a percentage point near its crucial 5,050 bastion.

Meanwhile, all the sectoral indices on the NSE settled in the positive territory with CNX Media gaining the most, up 2.37% followed by Bank Nifty up by 2.14%, CNX Realty up by 2.13% and CNX Auto up by 1.31% in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, tumbled 5.06% and reached 23.64.

The India VIX witnessed contraction of 5.06% at 23.64 as compared to its previous close of at 24.90 on Wednesday.

The 50-share S&P CNX Nifty gain 52.55 by point or 1.05% to settle at 5,049.65.

Nifty June 2012 futures closed at 5,029.35 at a discount of 20.30 points over spot closing of 5,049.65, while Nifty July 2012 futures were at 5,045.70 at a discount of 3.95 points over spot closing. The near month June 2012 derivatives contract will expire on Thursday i.e. June 28, 2012. Nifty June futures saw an addition of 0.52 million (mn) units taking the total outstanding open interest (OI) to 15.96 mn units.

From the most active contract, Tata Motors June 2012 futures were at a premium of 0.75 point at 237.05 compared with spot closing of 236.30. The number of contracts traded was 17,472.

DLF June 2012 futures were at a premium of 0.70 point at 194.70 compared with spot closing of 194.00. The number of contracts traded was 10,339.

Tata Steel June 2012 futures were at a discount of 0.10 point at 409.90 compared with spot closing of 410.00. The number of contracts traded was 10,429.

ICICI Bank June 2012 futures were at a discount of 9.80 point at 827.20 compared with spot closing of 837.00. The number of contracts traded was 24,131.

Reliance Industries June 2012 futures were at a premium of 0.20 point at 722.20 compared with spot closing of 722.00. The number of contracts traded was 26,062. 

Among Nifty calls, 5100 SP from the Jun month expiry was the most active call with an addition  of 0.42 million open interest.

Among Nifty puts, 4800 SP from the Jun month expiry was the most active put with contraction of 0.01 million open interest.

The maximum OI outstanding for Calls was at 5100 SP (4.96mn) and that for Puts was at 4800 SP (7.35mn).

The respective Support and Resistance levels are: Resistance 5070.28-- Pivot Point 5039.01--Support 5018.38.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.55 for Jun -month contract.

The top five scrips with highest PCR on OI were MRPL 11.00, ABG Ship 7.33, ABB 3.00, Orient Bank 3.00, and LT 1.40.

Among the most active underlying, LITL witnessed contraction of 0.68 million of Open Interest in the June month futures contract followed by IFCI which witnessed an addition of 0.38 million of Open Interest in the near month contract. Meanwhile, RCOM witnessed contraction of 0.38 million in the June month futures. Also, Tata Motors witnessed contraction of 0.90 million in Open Interest in the June month contract. Finally, Jaiprakash Associates witnessed contraction of 2.96 million of Open Interest in the near month futures contract.