Nifty negotiates positive close in highly volatile session

After a massive gain of about 190 points in previous three sessions, the domestic index Nifty witnessed consolidation on Wednesday. Though, market traded in a tight-band throughout the session and managed to negotiate a positive close at last. Investors remained on the side lines ahead of outcome of the US Fed meeting that would conclude today as well as on the ECB meeting scheduled tomorrow. Globally, regional peers ended mixed ahead of outcome of Federal Reserve’s meeting while, European counters traded on a positive note during the early trade. Back home, the market-men remained hopeful for some form of action in terms of reforms or diesel price after the Cabinet reshuffle. P Chidambaram has been appointed as the new Finance Minister. He took over the portfolio from Prime Minister Manmohan Singh who had been holding temporary charge after Pranab Mukherjee.

Earlier, market traded listless during first half of trade as investors turned cautious after HSBC purchasing managers’ index (PMI), a headline index designed to measure the overall health of the manufacturing sector, expanded at the slowest pace in the past eight months to 52.9 in July, 2012 as against 55.0 in the previous month of 2012. Afterwards, market continued gyrating near its pre-close mark, lacking any significant positive upside trigger. Meanwhile, the sentiments also got dampen after India’s exports fell 5.45 percent to $25.1 billion in June, while imports fell 13.46 percent to $35.4 billion, leaving a trade deficit of $10.3 billion, government data showed. But, market witnessed turnaround in second half and touched intraday high in early noon trade supported by firm opening in European markets. Moreover, pharma sector too supported the sentiments led by Cipla, up by 4.50% which reported better than expected Q1 numbers. The company reported a surge of 58.19% in its net profit at Rs 400.76 crore for the quarter, while its total income increased by 23.85% to Rs 2011.25 crore. Cipla’s strong Q1 results sparked rally in some other pharma stocks. Sun Pharmaceuticals Industries and Wockhardt hit record highs. But gains remained capped as shares of three public sector oil marketing companies edged lower in the trade after under-recoveries on diesel and PDS kerosene rose effective August 1, 2012. Finally, Nifty snapped the day’s trade with a slender gain of over 10 points.

Meanwhile, the NSE CNX Pharma remained the major gainer, up 1.16% followed by CNX PSU Bank up 1.12% and CNX Realty up by 0.85% while CNX Metal and CNX IT declined 0.73% and 0.43% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 2.74% and reached 16.45.

The India VIX witnessed addition of 2.75% at 16.45 as compared to its previous close of at 16.01 on Tuesday.

The 50-share S&P CNX Nifty gain 11.50 points or 0.22% to settle at 5,240.50.

Nifty August 2012 futures closed at 5256.30 on Wednesday at a premium of 15.80 points over spot closing of 5,240.50, while Nifty September 2012 futures were at 5282.20 at a premium of 41.70 points over spot closing. Nifty August futures saw addition of 0.15 million (mn) units taking the total outstanding open interest (OI) to 22.34 mn units. The near month August 2012 derivatives contract will expire on Thursday i.e. August 30, 2012.

From the most active contracts, SBI August 2012 futures were at a premium of 4.90 points at 2038.30 compared with spot closing of 2,033.40. The number of contracts traded was 31,284.

ICICI Bank August 2012 futures were at a premium of 4.45 point at 964.05 compared with spot closing of 959.60. The number of contracts traded was 15,004.

Reliance Inds August 2012 futures were at a premium of 3.40 point at 750.15 compared with spot closing of 746.75. The number of contracts traded was 7,753.

Tata Motors August 2012 futures were at a premium of 0.30 points at 227.65 compared with spot closing of 227.35. The number of contracts traded was 11,536.

Cipla August 2012 futures were at a premium of 1.45 point at 355.45 compared with spot closing of 354.00. The number of contracts traded was 7,764.

Among Nifty calls, 5300 SP from the August month expiry was the most active call with an contraction of 0.01 million open interest.

Among Nifty puts, 5200 SP from the August month expiry was the most active put with addition of 0.95 million open interest.

The maximum OI outstanding for Calls was at 5300 SP (4.13 mn) and that for Puts was at 5200 SP (4.73 mn).

The respective Support and Resistance levels are: Resistance 5253.68 -- Pivot Point 5233.17 --Support 5219.98.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.40 for August -month contract.

The top five scrips with highest PCR on OI were Oriental Bank 5.00, WEL Corp 4.56, Andhra Bank 3.00, ON Mobile 2.83 and PTC 2.67.

JP Associates, HDIL, Tata Motors, DLF and HDFC remained the most active underlying.