Bulls continue to show aggression; Nifty reclaims 5,300 mark

Sentiment remained bullish for second consecutive day with Nifty recapturing 5,300 mark on hopes that finance minister P Chidambaram would take some bold steps to revive the economy. Moreover, global indices too supported the rally as Asian pacific shares ended in fine contour as investors’ maintained hope that Europe will take further action to tackle its debt crisis, while the United States and China, too will adopt stimulus measures to boost growth. In addition, European counters traded mostly in the green terrain in early trade supported by decent earnings, along with German Chancellor Angela Merkel's backing of the European Central Bank's bond-buying plan. Back home, strengthening rupee too underpinned the sentiments. Rupee traded higher by 14 paise at 55.38 per dollar in the late morning trade on sustained selling of dollars from banks and exporters on persistent capital inflows from foreign funds.

Earlier, market made a gap-up opening hitting 4 week highs on continued buying by funds and retailers amid a firming trend in global markets. The sentiments also strengthened by buying in software pack, which rose over one and half a percent after Cognizant Technology Solutions Corp raised its adjusted full-year profit forecast at a time when its Indian peers have been painting a gloomy picture for the rest of year on slowdown in global outsourcing spends. Afterwards, the benchmarks continued its bull run through the session as rate-sensitive sectors like, auto, realty and banking were in the limelight following the finance minister’s comments that current interest rates are high and it is necessary to take carefully calibrated risks in order to stimulate investment and to ease the burden on consumers. Market picked up the pace in second half helped by positive opening in European counters. Moreover, media stocks too edged higher as about 50% of Mumbai’s TV households have switched to set top boxes, indicating the pace at which digitization of cable services has picked up over the last few months. However, in the final few minutes market witnessed a mild profit booking after touching its intraday high near crucial 5,350 level. Finally, Nifty ended the day’s trade comfortably over its crucial 5,300 level with a gain of over fifty points.

Meanwhile, most of the sectoral indices on the NSE settled in the positive territory with CNX IT gaining the most, up 1.77% followed by CNX Auto up by 1.52% and CNX Realty up by 1.49% while, CNX Pharma declined marginally by 0.05%, remained the lone loser. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, down marginally by 0.06% and reached 16.21.

The India VIX witnessed contraction of 0.06% at 16.21 as compared to its previous close of at 16.22 on Monday.

The 50-share S&P CNX Nifty gained 54.15 points or 1.03% to settle at 5,336.70.

Nifty August 2012 futures closed at 5347.70 on Tuesday at a premium of 11.00 points over spot closing of 5,336.70, while Nifty September 2012 futures were at 5373.60 at a premium of 36.90 points over spot closing. Nifty August futures saw an addition of 0.71 million (mn) units taking the total outstanding open interest (OI) to 23.21 mn units. The near month August 2012 derivatives contract will expire on Thursday i.e. August 30, 2012.

From the most active contracts, DLF August 2012 futures were at a discount of 3.80 points at 215.00 compared with spot closing of 218.80. The number of contracts traded was 11,362.

Tata Motors August 2012 futures were at a premium of 0.60 point at 239.15 compared with spot closing of 238.55. The number of contracts traded was 17,320.

Tata Steel August 2012 futures were at a premium of 2.95 point at 408.85 compared with spot closing of 405.90. The number of contracts traded was 8,598.

Reliance Industries August 2012 futures were at a premium of 4.40 points at 786.15 compared with spot closing of 781.75. The number of contracts traded was 16,997.

ICICI Bank August 2012 futures were at a premium of 3.40 point at 975.90 compared with spot closing of 972.50. The number of contracts traded was 17,115.

Among Nifty calls, 5500 SP from the August month expiry was the most active call with an addition of 0.88 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 5500 SP (9.27 mn) and that for Puts was at 5000 SP (10.54 mn).

The respective Support and Resistance levels are: Resistance 5363.98 -- Pivot Point 5322.81 -- Support 5295.53.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.46 for August -month contract.

The top five scrips with highest PCR on OI were SKUMARSYNF 13.00, WEL Corp 3.42, Orient Bank 2.50, YES Bank 2.25, and STR Tech 2.00 

Among the most active underlying, IFCI witnessed an addition of 0.12 million of Open Interest in the August month futures contract followed by RCOM which witnessed contraction of 0.94 million of Open Interest in the near month contract. Meanwhile, JP Associates witnessed an addition of 1.35 million in the August month futures. Also, Renuka Sugars witnessed an addition of 0.20 million in Open Interest in the August month contract. Finally, HDIL witnessed an addition of 0.30 million of Open Interest in the near month futures contract.