Final hour recovery helps Nifty to hold back its 5,300 mark

Domestic index S&P CNX Nifty witnessed recovery in the final hour of trade on Friday, after languishing in the red for most part of the day, as market participants engaged themselves in buying beaten down fundamentally strong stocks on reform hopes. The index ended the session near its pre-close mark with negative bias but, held back its crucial 5,300 mark quite comfortably. However, global cues remained subdued as most of the Asian markets fell on Friday on the back of weak Chinese trade data that reinforced worries over slowdown in the world's second largest economy. China's General Administration of Customs said exports grew just one percent in July year-on-year to $176.9 billion, while imports rose 4.7 percent to $151.8 billion, cutting the trade surplus to $25.1 billion from $31.7 billion in June. While, European shares fell in early trade, after a five-day winning streak, as weaker-than-expected Chinese economic data hit equity markets.

Initially, the Indian equity benchmark made a quiet opening with negative bias following weak Asian markets. Afterwards, market witnessed a choppy trade in first half due to lack of positive trigger. Market witnessed a steep fall in the early noon trade following decline of over four percent in shares of State Bank of India (SBI) as bank’s gross non-performing assets (NPAs) rose to 4.99% in the April-June quarter as against 3.52% in the same quarter previous year while net NPAs increased to 2.22%. Though, the PSU bank has registered a surge of 136.91% in its net profit at Rs 3751.56 crore for the quarter under review as compared to Rs 1583.55 crore for the same quarter in the previous year. Selling got intensified as European counters too opened with a cut of about half a percent and domestic index touched its intraday low breaching its psychological 5,300 mark. But, market showed some resilience in last leg of trade and regained their lost ground paring almost entire initial losses supported by software and technology stocks. Scrips like Tech Mahindra, HCL Technologies, Tata Consultancy Services and Mahindra Satyam edged higher in the trade after better than expected US economic data on August 9, 2012, and on a weak rupee. Moreover, FMCG stocks also remained in demand, with Hindustan Unilever (HUL), ITC and Bajaj Corp hitting record high and Tata Global Beverages hitting 52-week high. Finally, Nifty ended the session with slender cut of about 2.5 odd points.

Meanwhile, most of the sectoral indices on the NSE were settled in the red, CNX PSU Bank remained the major gainer, down 2.87% followed by CNX Auto down 0.98% and Bank Nifty down by 0.83% while CNX IT and CNX Media up by 1.33% and 1.31% respectively in the trade, respectively. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 1.59% and reached 16.07.

The India VIX witnessed contraction of 1.59% at 16.07 as compared to its previous close of at 16.33 on Thursdays.

The 50-share S&P CNX Nifty lost 2.55 points or 0.05% to settle at 5320.40.

Nifty August 2012 futures closed at 5345.10 on Friday at a premium of 24.70 points over spot closing of 5,320.40, while Nifty September 2012 futures were at 5369.15 at a premium of 48.75 points over spot closing. Nifty August futures saw an addition of 0.37 million (mn) units taking the total outstanding open interest (OI) to 24.33 mn units. The near month August 2012 derivatives contract will expire on Thursday i.e. August 30, 2012.

From the most active contracts, Bharti Airtel August 2012 futures were at a discount of 0.20 points at 256.45 compared with spot closing of 256.65. The number of contracts traded was 15,212.

Tata Motors August 2012 futures were trading at a premium of 1.85 points at 233.40 compared with spot closing of 231.55. The number of contracts traded was 15,663.

HDFC Bank August 2012 futures were at a premium of 3.90 point at 606.25 compared with spot closing of 602.35. The number of contracts traded was 8,461.

Tata Steel August 2012 futures were at a premium of 2.35 points at 402.70 compared with spot closing of 400.35. The number of contracts traded was 8,727.

ICICI Bank August 2012 futures were at a premium of 3.35 point at 960.85 compared with spot closing of 957.50. The number of contracts traded was 20,459. 

Among Nifty calls, 5500 SP from the August month expiry was the most active call with an addition of 0.03 million open interest.

Among Nifty puts, 5000 SP from the August month expiry was the most active put with an addition of 0.02 million open interest.

The maximum OI outstanding for Calls was at 5500 SP (8.53 mn) and that for Puts was at 5000 SP (10.57 mn).

The respective Support and Resistance levels are: Resistance 5335.63 -- Pivot Point 5314.86 -- Support 5299.63.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.54 for August -month contract.

The top five scrips with highest PCR on OI were Orient Bank 4.00, SKUMARSYNF 3.25, YES Bank 2.10, WEL Corp 2.10 and UNIPHOS 1.77.