Firm global cues help Nifty to end near day’s high

Prolonging its rally for third consecutive session, market witnessed a tremendous recovery in second half of the day’s trade on Tuesday and Nifty snapped the session with over half a percent gains recapturing its crucial 5,200 mark amid firm European cues. On the global front, most of the Asian counterparts ended the day’s trade in positive terrain with South Korea, Taiwan and Japanese markets closing near the day’s high. European stocks were also trading in the green ahead of European Central Bank’s (ECB) meet scheduled for August 2, 2012. There is some speculation that the ECB may resume its bond buying programme to bring down rising Spanish and Italian borrowing costs, but uncertainty persists partly because Germany has repeated its opposition to such a step. Back home, the Reserve Bank of India (RBI) cut its economic growth outlook for FY13 to 6.5 percent, from the 7.3 percent assumption made in April.

Initially, benchmark traded cautiously with negative bias in early trade ahead of RBI’s quarterly monetary policy review. In the late morning session, the index fell sharply and touched its intraday low near its psychological 5,150 mark after RBI kept rates unchanged. However, the apex bank reduced the Statutory Liquidity Ratio (SLR) of scheduled commercial banks to 23% from 24% of their net demand and time liabilities (NDTL) with effect from the fortnight beginning August 11, 2012. However, the Nifty rebounded quite nicely in the last couple of hours of trade following stability in global markets. The firmness in European markets ahead of European Central Bank's (ECB) meet scheduled for Thursday i.e. August 2, helped Indian market to bounce back. Moreover, sentiments were also supported by software pack, which surged about a percent and stocks like Wipro, TCS, Financial Technologies and HCL Technologies edged higher in the trade after Prime Minister Manmohan Singh set up a panel headed by N Rangachary to review taxes in information technology and R&D sectors. Moreover, the stocks were also supported on report that RBI withdrew a previous order that made it compulsory for exporters to convert half of their forex earnings kept in local banks into rupees. Finally, Nifty snapped the day’s trade comfortably over its crucial 5,200 mark with a gain of over half a percent.

Meanwhile, most of the sectoral indices on the NSE were settled in the green, CNX Realty remained the major gainer, up 1.14% followed by CNX IT up 0.87% and CNX Metal up by 0.83% while CNX PSU Bank and CNX Infra declined 0.89% and 0.48% in the trade, respectively. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 3.55% and reached 16.01.

The India VIX witnessed contraction of 3.55% at 16.01 as compared to its previous close of at 16.60 on Monday.

The 50-share S&P CNX Nifty gain 29.20 points or 0.56% to settle at 5229.00.

Nifty August 2012 futures closed at 5,240.55 at a premium of 11.55 points over spot closing of 5,229.00, while Nifty September 2012 futures were at 5266.80 at a premium of 37.80 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 0.14 million (mn) units taking the total outstanding open interest (OI) to 22.19 mn units.

From the most active contract, Tata Motors August 2012 futures were at a premium of 0.55 point at 226.65 compared with spot closing of 226.10. The number of contracts traded was 15,201.

DLF August 2012 futures were at a discount of 1.60 point at 207.40 compared with spot closing of 209.00. The number of contracts traded was 9,808.

ICICI Bank August 2012 futures were at a premium of 5.20 point at 966.15 compared with spot closing of 960.95. The number of contracts traded was 27,443.

Reliance Industries August 2012 futures were at a premium of 3.15 points at 745.80 compared with spot closing of 742.65. The number of contracts traded was 9,090.

Tata Steel August 2012 futures were at a premium of 1.15 point at 416.35 compared with spot closing of 415.20. The number of contracts traded was 12,415.  

Among Nifty calls, 5400 SP from the August month expiry was the most active call with an addition of 0.23 million open interest.

Among Nifty puts, 5000 SP from the August month expiry was the most active put with contraction of 0.20 million open interest.

The maximum OI outstanding for Calls was at 5400 SP (5.75mn) and that for Puts was at 5000 SP (8.19 mn).

The respective Support and Resistance levels are: Resistance 5257.68 -- Pivot Point 5205.86--Support 5177.18.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.37 for August -month contract.

The top five scrips with highest PCR on OI were PTC 8.00, ON Mobile 5.67, Orient Bank 5.00, WEL Corp 4.56, and Andhra Bank 3.00.

Among the most active underlying, Suzlon witnessed an addition of 12.32 million of Open Interest in the August month futures contract followed by IFCI which witnessed an addition of 1.52 million of Open Interest in the near month contract. Meanwhile, RCOM witnessed contraction of 0.26 million in the August month futures. Also, JP Associaties witnessed contraction of 0.49 million in Open Interest in the August month contract. Finally, Tata Motors witnessed contraction of 1.60 million of Open Interest in the near month futures contract.