Bulls capitalize on firm global cues; Nifty just shy 5,200 mark

Buoyed by positive global cues, Nifty garnered gain of about 100 points and ended near its intraday high as investors took positions in the rate sensitives like banking, auto and realty stocks on hopes that Reserve Bank of India (RBI) will spring a pleasant surprise in the form of a rate cut. Moreover, global cues too remained supportive, as all the Asian equity indices, barring Shanghai Composite, went home in green on the first day of week on hopes that the US Federal Reserve and European Central Bank will act to support their fragile economies. Moreover, European counters were trading firmly at this point of time as European leaders stated that they would intervene to help the troubled countries from high cost of borrowing. Moreover, hopes for more central bank stimulus measures in Europe and the US to help kick-start global economic growth too underpinned the sentiments.

Back home, Indian benchmark, supported by firm Asian cues, made a gap-up opening with Nifty recapturing its crucial 5,150 mark in initial trade. Moreover, sentiment was buoyed by positive vibes coming from the European leaders that they would intervene to help the troubled countries from high cost of borrowing. Buying in realty, banking and auto stocks, on rate cut hopes, too added the sentiments. In addition, buying in power sector stocks also boosted investors’ confidence after power minister Sushil Kumar Shinde said that ‘60% of power has been restored in the northern region and the remaining will be restored in few hours. Buying got intensified in noon trade after banks like Corporation Bank, Syndicate Bank, Indian Overseas Bank, Allahabad Bank, Oriental Bank of Commerce and Bank of Baroda reported better than expected Q1 numbers. Moreover, firm opening in European counters too aided the sentiments. Afterwards, rally continued and Nifty touched its intraday high recapturing 5,200 mark. Buying in metal space also lifted the sentiments and stocks like, JSW Steel, Jindal Steel & Power, Hindalco Industries, Nalco and Hindustan Zinc edged higher after LMEX, a gauge of six metals traded on the London Metal Exchange, rose 1.22% on July 27, 2012. Finally, Nifty settled near 5,200 mark with a gain of about 100 points.

Meanwhile, all the sectoral indices on the NSE settled in the positive territory with CNX PSU Bank gaining the most, up 4.06% followed by CNX Realty up by 3.65%, CNX Infra up by 3.14% and Bank Nifty up by 2.68% in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, rose 0.97% and reached 16.60.

The India VIX witnessed an addition of 0.97% at 16.60 as compared to its previous close of at 16.44 on Friday.

The 50-share S&P CNX Nifty gain 99.95 points or 1.96% to settle at 5,199.80.

Nifty August 2012 futures closed at 5,216.70 at a premium of 16.90 points over spot closing of 5,199.80, while Nifty September 2012 futures were at 5243.50 at a premium of 43.70 points over spot closing. The near month August 2012 derivatives contract will expire on Thursday i.e. August 30, 2012. Nifty August futures saw addition of 0.93 million (mn) units taking the total outstanding open interest (OI) to 22.04 mn units.

From the most active contract, Tata Motors August 2012 futures were at a premium of 1.50 point at 222.50 compared with spot closing of 221.00. The number of contracts traded was 12,942.

BHEL August 2012 futures were at a premium of 1.45 point at 218.00 compared with spot closing of 216.55. The number of contracts traded was 7,891.

Tata Steel August 2012 futures were at a premium of 1.95 point at 413.45 compared with spot closing of 411.50. The number of contracts traded was 14,430.

ICICI Bank August 2012 futures were at a premium of 5.10 points at 968.45 compared with spot closing of 963.35. The number of contracts traded was 26,087.

SBI August 2012 futures were at a premium of 10.00 point at 2039.00 compared with spot closing of 2029.00. The number of contracts traded was 49,513.

Among Nifty calls, 5400 SP from the August month expiry was the most active call with an addition of 0.95 million open interest.

Among Nifty puts, 5000 SP from the August month expiry was the most active put with an addition of 0.21 million open interest.

The maximum OI outstanding for Calls was at 5400 SP (5.52mn) and that for Puts was at 5000 SP (8.39 mn).

The respective Support and Resistance levels are: Resistance 5227.68 -- Pivot Point 5177.71--Support 5150.83.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.25 for July-month contract.

The top five scrips with highest PCR on OI were ON Mobile 8.50, WEL Corp 5.86, Orient Bank 4.00, Andhra Bank 3.00 and Bank Baroda 2.00.

Among the most active underlying, Suzlon witnessed contraction of 1.02 million of Open Interest in the August month futures contract followed by IFCI which witnessed contraction of 1.20 million of Open Interest in the near month contract. Meanwhile, RCOM witnessed contraction of 1.15 million in the August month futures. Also, JP Associaties witnessed contraction of 0.84 million in Open Interest in the August month contract. Finally, Tata Motors witnessed contraction of 1.72 million of Open Interest in the near month futures contract.