Nifty shows marginal pull-back; shuts near its previous close

Snapping its two days losing streak, local index -- Nifty -- ended the session with a marginal gain of 10 points. Moreover, market traded above the equator for most part of the day’s trade as investors kept themselves busy in taking positions in beaten down fundamentally strong stocks after two days of pounding. Globally, Asian markets recovered from the day’s lows after a provisional China manufacturing PMI data from HSBC showed improvement in July over the preceding month. However, European shares fell as data revealed Europe’s debt crisis had caused a sharp slowdown in German factory activity. Moreover, Moody’s lowered the outlook for Germany, Netherlands and Luxembourg to negative due to the ‘rising uncertainty’ about the financial crisis also dampened the sentiments. Back home, hike of 70 paise per litre in petrol prices by some state run fuel retailers supported the positive sentiments during the session, which also sparked expectation that diesel price hike too would be around the corner.

Bucking a weak global trend, domestic market got off with a decent start supported by buying in FMCG space led by strong performance by Hindustan Unilever, which rose over seven percent on better-than-expected earnings. The company reported a surge of 112.26% in its net profit at Rs 1331.19 crore for the Q1FY13 while, the total income of the company has increased by 16.99% to Rs 6597.38 crore for quarter under review. Other FMCG companies like Dabur and Colgate-Palmolive also registered a gain of 30.54% and 16.90% in its net profit for Q1FY13. Afterwards, market traded in the fine fettle above its equator as sentiments also got some support from cement stocks, which rose on the buzz of price hike. However, in the noon trade market entered into the negative terrain following report that Germany’s flash manufacturing PMI fell to 43.3 in July, well below forecasts for 45.3, while services PMI was also below forecasts at 49.7. The data followed French manufacturing PMI, which was also well below forecasts. But, recovery in Asian and European counters helped the local benchmark to reclaim positive trajectory and the index touched the intraday high near its crucial 5,150 mark. Moreover, Sugar space too aided the sentiments as stocks like, Triveni Engineering, Simbhaoli Sugars, Rana Sugar, Balrampur Chini Mills and Shree Renuka Sugar, which edged higher after domestic sugar futures moved higher. The key August sugar contract on National Commodity and Derivatives Exchange (NCDEX) was up 1.03% at Rs 3348 per 100 kilogram. However, gains remained capped as software pack tumbled over half a percent pressurized by Wipro, which tumbled over three percent after reporting a fall of 5.03% in its net profit at Rs 1158.00 crore for Q1FY13 though; the total income of the company has increased by 18.69% at Rs 892.75 crore the quarter under review. Finally, market ended the day’s trade with a marginal gain of 10 points.

Meanwhile, most of the sectoral indices on the NSE were settled in the green, CNX FMCG remained the major gainer, up 1.86% followed by CNX Energy up 0.59% and CNX Pharma up by 0.37% while CNX IT declined 0.68% in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 9.06% and reached 16.97.

The India VIX witnessed contraction of 9.06% at 16.97 as compared to its previous close of at 18.66 on Monday.

The 50-share S&P CNX Nifty gained 10.25 points or 0.20% to settle at 5,128.20.

Nifty July 2012 futures closed at 5,135.35 at a premium of 7.15 points over spot closing of 5,128.20, while Nifty August 2012 futures were at 5159.50 at a premium of 31.30 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 5.05 million (mn) units taking the total outstanding open interest (OI) to 16.95 mn units.

From the most active contract, Tata Motors July 2012 futures were at a premium of 0.35 point at 216.35 compared with spot closing of 216.00. The number of contracts traded was 13,651.

Tata Steel July 2012 futures were at a discount of 0.40 point at 397.95 compared with spot closing of 398.35. The number of contracts traded was 14,690.

BHEL July 2012 futures were at a premium of 0.60 point at 218.25 compared with spot closing of 217.65. The number of contracts traded was 13,721.

ICICI Bank July 2012 futures were at a premium of 2.25 points at 919.25 compared with spot closing of 917.00. The number of contracts traded was 19,956.

HUL July 2012 futures were at a discount of 0.10 point at 476.40 compared with spot closing of 476.50. The number of contracts traded was 16,413.

Among Nifty calls, 5300 SP from the July month expiry was the most active call with contraction of 1.27 million open interest.

Among Nifty puts, 5000 SP from the July month expiry was the most active put with contraction of 0.28 million open interest.

The maximum OI outstanding for Calls was at 5300 SP (8.76mn) and that for Puts was at 5000 SP (7.99 mn).

The respective Support and Resistance levels are: Resistance 5147.05 -- Pivot Point 5125.15--Support 5106.3.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.07 for July -month contract.

The top five scrips with highest PCR on OI were AIL 4.00, Bajaj-Auto 2.34, Grasim 1.33, Bata India 1.18, and Ambuja Cement 1.13.

Among the most active underlying, Suzlon witnessed contraction of 35.81 million of Open Interest in the July month futures contract followed by IFCI which witnessed contraction of 4.24 million of Open Interest in the near month contract. Meanwhile, RCOM witnessed contraction of 9.40 million in the July month futures. Also, Jaiprakash Associates witnessed contraction of 4.54 million in Open Interest in the July month contract. Finally, Tata Motors witnessed contraction of 3.47 million of Open Interest in the near month futures contract.