Bargain-hunting helps Nifty to regain crucial 5,100 mark

After previous session’s bloodbath, bulls retaliate back snapping the erratic day of trade in a great fashion garnering gains of over half a percent as investors kept themselves busy in buying beaten down fundamentally strong stocks. Moreover, global cues remained mixed as Asian counters snapped the day’s trade on a mixed note as investors remained on the sideline ahead of Federal Open Market Committee’s (FOMC's) two-day meeting, which will start from today. Besides, the relief from Greece’s election results faded away amid concern that the financial crisis in the 17 nations that use the euro was far from over. However, all the European counterparts were trading in the positive terrain at this point of time. Back home, buying interest in FMCG and oil shares boosted the market sentiments while, rebound in banking shares too aided the sentiments.

Domestic market opened on a positive note in early trade on the back of bargain-hunting, the index held their ground for almost half an hour, until they witnessed a fall owing to weak global and Asian cues. The market nose-dived into the negative terrain and registered intraday lows near 5,050 mark following unsupportive leads from Asian counters. However, the setback was short-lived as the index pared losses and re-entered the positive terrain as 5,050 bastion proved to be the exceptional support level for Nifty. Mid noon proved as an extremely volatile session, as Nifty turned negative after touching 5,100 mark, but the volatility remained for shorter period and Nifty regained its crucial 5,100 mark in final hour of trade as sentiment was supported by firm opening in European counters. Meanwhile, shares of oil marketing companies IOC, HPCL and BPCL surged on expectation of partial decontrol in diesel price and increase in regulated products prices. In addition, crude oil futures in the international market fell sharply, with the Brent in London falling below $95 per barrel. Moreover, the investors confident was also boosted after stocks of FMCG companies traded jubilantly on report that India’s annual monsoon rains have covered almost half of the country after having briefly stalled last week, indicating signs of a pick-up after falling short in the first 15 days of the season. Finally, Nifty ended unpredictable day of trade near its day’s high with a decent gain of 40 points.

Meanwhile, most of the sectoral indices on the NSE were settled in the green, CNX FMCG remained the major gainer, up 1.48% followed by CNX Pharma up 1.16% and CNX Infra up by 0.55% while CNX IT and CNX Metal declined 0.21% and 0.09% respectively remained the only losers in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, tumbled 5.18% and reached 21.43.

The India VIX witnessed contraction of 5.18% at 21.43 as compared to its previous close of at 22.60 on Monday.

The 50-share S&P CNX Nifty gain 0.78 by point or 39.60% to settle at 5,103.85

Nifty June 2012 futures closed at 5,110.60 at a premium of 6.75 points over spot closing of 5,103.85, while Nifty July 2012 futures were at 5,128.30 at a premium of 24.45 points over spot closing. The near month June 2012 derivatives contract will expire on Thursday i.e. June 28, 2012. Nifty June futures saw a contraction of 0.12 million (mn) units taking the total outstanding open interest (OI) to 16.38 mn units.

From the most active contract, RCom June 2012 futures were at a discount of 0.45 point at 63.55 compared with spot closing of 64.00. The number of contracts traded was 16,212.

Tata Motors June 2012 futures were at a premium of 0.80 point at 239.20 compared with spot closing of 238.40. The number of contracts traded was 17,949.

HDIL June 2012 futures were at a discount of 0.25 point at 72.95 compared with spot closing of 73.20. The number of contracts traded was 11,199.

Tata Steel June 2012 futures were at a discount of 0.70 point at 419.20 compared with spot closing of 419.90. The number of contracts traded was 18,384.

ICICI Bank June 2012 futures were at a premium of 1.10 point at 828.10 compared with spot closing of 827.00. The number of contracts traded was 22,902.

Among Nifty calls, 5200 SP from the Jun month expiry was the most active call with an addition of 0.38 million open interest.

Among Nifty puts, 4800 SP from the Jun month expiry was the most active put with an addition of 0.20 million open interest.

The maximum OI outstanding for Calls was at 5200 SP (7.16mn) and that for Puts was at 4800 SP (8.71mn).

The respective Support and Resistance levels are: Resistance 5128.93-- Pivot Point 5088.51--Support 5063.43.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.68 for June-month contract.

The top five scrips with highest PCR on OI were ABG Ship 6.33, ABB 5.00, Orient Bank 3.00, Tata Chem 3.00 and ITC 1.83.

Among the most active underlying, IFCI witnessed contraction of 2.11 million of Open Interest in the June month futures contract followed by Alok Industries which witnessed contraction of 15.15 million of Open Interest in the near month contract. Meanwhile, RCOM witnessed contraction of 1.54 million in the June month futures. Also, Jaiprakash Associates witnessed contraction of 0.11 million in Open Interest in the June month contract. Finally, Tata Motors witnessed an addition of 0.13 million of Open Interest in the near month futures contract.