Nifty extend gains for second straight day buoyed by firm global cues

Buoyed by firm global cues, domestic index Nifty extended its previous session’s gains and snapped the day’s trade near its crucial 5,200 mark with a gain of over half a percent. Globally, the sentiments remained sanguine as US markets extended their rally for the second day overnight after better than expected corporate earnings from bellwethers like Intel and Honeywell defying  the market’s worst fears while, Asian markets gained today as there was expectation that central banks all across the world would cut rates and boost economic growth. Meanwhile, European counters were trading comfortably in the green at this point of time. Back home, the rupee was trading at a session high of 55.14-16 versus its previous close of 55.48-49, tracking a jump in the euro and gains in domestic shares.

Initially, the key benchmark kick-started the day on a positive note on the back of firm global cues and strengthening rupee. Moreover, investors’ sentiments remained encouraged on expectation that Government, after the completion of Presidential election this week, will take some reform-oriented measures. Afterwards, the index witnessed a range-bound trade, but held on to the positive terrain. The sentiments were supported largely by IT space as it remained the top gainer and stocks like Infosys, Wipro, TCS, HCL Technologies, MphasiS, Tech Mahindra and Oracle Financial Services Software edged higher as US-based IBM reported better-than-expected earnings after trading hours in the US. During afternoon session, the Indian benchmark held its gaining momentum following a strong opening on the European markets. Moreover, rally in PSU oil marketing companies too aided the sentiments. Stocks of BPCL, HPCL and IOC rose by 1-3 percent on buzz that apart from hiking diesel prices, the government is planning to quickly put in place a mechanism to cap the number of subsidized LPG cylinders for a household to 6-8 per year. However, gains remained capped as first quarter numbers of Hero Motocorp, DR Reddy’S Laboratories and Kotak Mahindra Bank disappointed the street. Finally, Nifty ended the session with a gain of over half a percent near its crucial 5,200 mark.

Meanwhile, most of the sectoral indices on the NSE were settled in the green, CNX IT remained the major gainer, up 1.79% followed by CNX Metal up 0.85% and CNX Realty up by 0.60% while CNX PSU Bank and CNX Auto declined 1.23% and 0.41% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, tumbled 6.08% and reached 16.38.

The India VIX witnessed contraction of 6.08% at 16.38 as compared to its previous close of at 17.44 on Wednesday.

The 50-share S&P CNX Nifty gained 26.40 points or 0.51% to settle at 5,242.70.

Nifty July 2012 futures closed at 5,257.00 at a premium of 14.30 points over spot closing of 5,242.70, while Nifty August 2012 futures were at 5280.15 at a premium of 37.45 points over spot closing. The near month July 2012 derivatives contract will expire on Thursday i.e. July 26, 2012. Nifty July futures saw contraction of 0.10 million (mn) units taking the total outstanding open interest (OI) to 23.73 mn units.

From the most active contract, Tata Motors July 2012 futures were at a premium of 0.20 point at 225.20 compared with spot closing of 225.00. The number of contracts traded was 9,893.

ICICI Bank July 2012 futures were at a premium of 2.55 point at 953.30 compared with spot closing of 950.75. The number of contracts traded was 20,867.

SBI July 2012 futures were at a premium of 5.85 point at 2163.45 compared with spot closing of 2157.60. The number of contracts traded was 31,734.

Axis Bank July 2012 futures were at a premium of 2.00 points at 1056.90 compared with spot closing of 1054.90. The number of contracts traded was 14,082.

Infosys July 2012 futures were at a premium of 4.45 point at 2,244.45 compared with spot closing of 2,240.00. The number of contracts traded was 19,870. Among Nifty calls, 5400 SP from the July month expiry was the most active call with an addition  of 0.11 million open interest.

Among Nifty puts, 5000 SP from the July month expiry was the most active put with contraction of 0.64 million open interest.

The maximum OI outstanding for Calls was at 5400 SP (9.37mn) and that for Puts was at 5000 SP (7.74 mn).

The respective Support and Resistance levels are: Resistance 5255.91 -- Pivot Point 5244.53--Support 5231.31.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.26 for July -month contract.

The top five scrips with highest PCR on OI were AIL 4.00, Bajaj-Auto 2.64, OPTO Circui 1.20, Bata India 1.19, and Gail 1.10.

Among the most active underlying, IFCI witnessed contraction of 0.90 million of Open Interest in the July month futures contract followed by RCOM which witnessed an addition of 0.55 million of Open Interest in the near month contract. Meanwhile, GMR Infra witnessed contraction of 4.88 million in the July month futures. Also, JP Associates witnessed contraction of 0.71 million in Open Interest in the July month contract. Finally, Tata Motors witnessed contraction of 1.41 million of Open Interest in the near month futures contract.