Late hour recovery helps Nifty to add half a percent gain

Turnaround in last leg of trade supported Nifty to snap the session at its intraday high near crucial 5,350 level with a gain of over half a percent as bargain hunting witnessed at lower levels. Though, Nifty traded near its pre-close level for most part of the day’s trade as investors played safe awaiting July inflation data to be announced tomorrow. On the global front, most of the Asian markets shut the shop in red on Monday as slowdown in Japan’s growth at annual rate of 1.4% in April-June quarter, increased worries about the health of the global economy. Meanwhile, European counters traded flat with negative bias in the early trade. Back home, Prime Minister Manmohan Singh downplayed Moody’s downgrade on India’s growth estimates, said that no doubt it is a cause of concern, but this did not mean that the country would not be able to do better than last year’s 6.5 percent growth.

Earlier, the benchmark kick-started the day on a flat note due to lack of local and global triggers. Moreover, the traders kept themselves aside from piling up positions ahead of July Wholesale Price Index (WPI) which will be closely watched by the market as Reserve Bank of India’s (RBI) main target is to bring inflation down below comfort level of 7%. However, the street is expecting it in the vicinity of 7.24% for July as against 7.25% in previous month while core inflation around 5-5.4% versus 4.9% in June. Afterwards, market traded in the tight band till mid noon trade as European counters too opened on a cautious note as growth worries weighed down the sentiments after Japanese GDP grew at an annualized pace of 1.4% in the three months through June. But it was the final hour of trade, where market picked up the pace supported by report that Department of Industrial Policy and Promotion (DIPP) is likely to ease stringent retail foreign direct investment norms in single-brand retail supported the market sentiments and stocks like Shoppers Stop, Pantaloon Retail, Provogue India, Brandhouse Retails, Archies and SRS all edging higher in the trade. Better than expected Q1 numbers from Oil & Natural Gas Corporation (ONGC) too supported the sentiments. The company reported a rise of 48.42% in its net profit at Rs 6077.70 crore for the quarter under review while, the total income of the company increased by 23.86% at Rs 21216.24 crore for Q1FY13. Decent Q1 numbers from Reliance Communication and Pfizer too assisted the market mood. However, the gains remained capped as there was a threat of India getting a downgrade from its sovereign rating; Fitch Ratings has said that possibility of downgrading the country’s sovereign rating is more than 50 percent in the next 12-24 months. Finally, Nifty snapped the day’s trade near its crucial 5,350 mark with a gain of about 30 points.

Meanwhile, most of the sectoral indices on the NSE were settled in the green, CNX Realty remained the major gainer, up 2.74% followed by CNX Infra up 1.14% and CNX Media up by 0.74% while CNX Auto declined 0.14% remained the lone loser in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 0.37% and reached 16.01.

The India VIX witnessed contraction of 0.37% at 16.01 as compared to its previous close of at 16.07 on Friday.

The 50-share S&P CNX Nifty gained 27.50 points or 0.52% to settle at 5347.90.

Nifty August 2012 futures closed at 5371.90 on Monday at a premium of 24.00 points over spot closing of 5,347.90, while Nifty September 2012 futures were at 5398.25 at a premium of 50.35 points over spot closing. Nifty August futures saw an addition of 0.95 million (mn) units taking the total outstanding open interest (OI) to 25.29 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 premium of 0.15 points at 260.45 compared with spot closing of 260.30. The number of contracts traded was 7,147.

Tata Motors August 2012 futures were trading at a premium of 1.25 points at 229.75 compared with spot closing of 228.50. The number of contracts traded was 13,849.

Tata Steel August 2012 futures were at a premium of 2.30 point at 397.80 compared with spot closing of 395.50. The number of contracts traded was 13,290.

ICICI Bank August 2012 futures were at a premium of 4.75 points at 955.25 compared with spot closing of 950.50. The number of contracts traded was 15,386.

SBI August 2012 futures were at a premium of 7.40 point at 1915.90 compared with spot closing of 1908.50. The number of contracts traded was 59,687. 

Among Nifty calls, 5500 SP from the August month expiry was the most active call with an addition of 0.02 million open interest.

Among Nifty puts, 5000 SP from the August month expiry was the most active put with contraction of 0.17 million open interest.

The maximum OI outstanding for Calls was at 5500 SP (8.56 mn) and that for Puts was at 5000 SP (10.40 mn).

The respective Support and Resistance levels are: Resistance 5363.88 -- Pivot Point 5336.46 -- Support 53.20.48.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.61 for August -month contract.

The top five scrips with highest PCR on OI were Orient Bank 4.00, YES Bank 2.12, WEL Corp 2.10 UNIPHOS 1.77 and PTC 1.75.