Final hour turnaround helps Nifty to reclaim 5,300 mark

After paring early gains in the first half of trade and entering the red zone in mid noon session, CNX S&P Nifty gained momentum in final hour and snapped the day’s trade tad above its crucial 5,300 mark with a marginal gain of 15 points. The global cues also remained supportive as overnight, the US stock markets closed in a higher short trading session on report of better than expected factory data while, in Asia, except Hang Seng and Shanghai Composite all the other markets closed in the green. However, European counters were trading in the red at this point of time. Back home, monsoon worries surfaced again after Agriculture Minister Sharad Pawar commented that monsoon rains have been 31% below average up to July 2.

Earlier, triggered by strong Asian cues and a positive start marked by rupee, the benchmark kicked-off trade on a positive note with Nifty recapturing its crucial 5,300 mark. Afterwards, the journey amidst great volatility, the gauge traded much above the equator for some part of the morning trade. Telecom stocks like Idea Cellular, Bharti Airtel and Reliance Communication supported the sentiments as all edged higher in the trade after TDSAT gave a split verdict on whether mobile operators could offer 3G services through roaming pacts. Meanwhile, service sector activity in India expanded in the month of June, but at a rate that was slightly lower than previous month levels. Nevertheless, the sector extended its growth momentum for the eighth consecutive month thanks largely to the strong output increase as order book volumes continued to expand. The service sector activity grew at a marginally slower pace of 54.3 in June, as against 54.7 in the previous month. However, the morning cheer was short-lived and market gave up all its gain during the mid noon session following fall in Indian currency, which pared its early gains and fell to 54.50 per dollar. Moreover, negative opening in European counters too dampened the sentiment and market touched its intraday low near 5,270 level. But it was the last leg of trade where the benchmark rose a little higher and marched much above the equator as the metal stocks rallied on the back of positive news from the Karnataka government. The Karnataka government recommended approval of eight iron ore mines and also okayed Sesa Goa's 2.2 million tonne iron ore mine. Further, trade sentiments improved as the rupee appreciated a bit against the dollar and rose to 54.26 per dollar. The gauges rose expediently and traded amidst much volatility in green till the end of trade. Finally, Nifty ended the trade just over its crucial 5,300 bastion.

Meanwhile, most of the sectoral indices on the NSE were settled in the green, CNX Metal remained the major gainer, up 2.06% followed by CNX Realty up 1.87% and CNX Infra up by 1.39% while CNX FMCG and CNX IT declined 0.25% and 0.21% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 1.56% and reached 18.27.

The India VIX witnessed contraction of 1.56% at 18.27 as compared to its previous close of at 18.56 on Tuesday.

The 50-share S&P CNX Nifty gained 14.60 points or 0.28% to settle at 5,302.55.

Nifty July 2012 futures closed at 5,322.65 at a premium of 20.10 points over spot closing of 5,302.55, while Nifty August 2012 futures were at 5349.45 at a premium of 46.90 points over spot closing. The near month July 2012 derivatives contract will expire on Thursday i.e. July 26, 2012. Nifty July futures saw an addition of 0.64 million (mn) units taking the total outstanding open interest (OI) to 23.29 mn units.

From the most active contract, Tata Motors July 2012 futures were at a discount of 2.35 point at 234.15 compared with spot closing of 236.50. The number of contracts traded was 12,432.

HDIL July 2012 futures were at a premium of 0.75 point at 92.95 compared with spot closing of 92.20. The number of contracts traded was 10,316.

Sesa Goa July 2012 futures were at a premium of 1.50 point at 204.20 compared with spot closing of 202.70. The number of contracts traded was 13,978.

Tata Steel July 2012 futures were at a discount of 8.85 points at 441.40 compared with spot closing of 450.25. The number of contracts traded was 10,929.

ICICI Bank July 2012 futures were at a premium of 2.30 point at 901.55 compared with spot closing of 899.25. The number of contracts traded was 16,928. 

Among Nifty calls, 5400 SP from the July month expiry was the most active call with an addition of 0.62 million open interest.

Among Nifty puts, 5000 SP from the July month expiry was the most active put with an addition of 0.31 million open interest.

The maximum OI outstanding for Calls was at 5400 SP (6.40mn) and that for Puts was at 5000 SP (6.91mn).

The respective Support and Resistance levels are: Resistance 5322.36 -- Pivot Point 5297.83--Support 5278.01.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.48 for July -month contract.

The top five scrips with highest PCR on OI were Adani Ports 2.00, APIL 2.00, MRF 2.00, Sun Pharma 1.66, and Ambuja Cement 1.51.

Among the most active underlying, IFCI witnessed contraction of 1.18 million of Open Interest in the July month futures contract followed by RCOM which witnessed an addition of 1.84 million of Open Interest in the near month contract. Meanwhile, Unitech witnessed an addition of 0.56 million in the July month futures. Also, Jaiprakash Associates witnessed an addition of 0.44 million in Open Interest in the July month contract. Finally, HDIL witnessed an addition of 1.24 million of Open Interest in the near month futures contract.