Firm global cues help market to end near day’s high; Nifty conquers 5,400 level

After an extended weekend, Nifty snapped the trading session with a bang recapturing its crucial 5,400 mark as investors’ welcome continued inflow of overseas capital and healthy trend across global markets. Globally, European shares and the euro edged higher on optimism that meetings on Greece’s future and a strategy being drawn up by the European Central Bank will lead to progress in solving the euro zone debt crisis. While, Asian counters traded in the fine fettle as investors welcomed reports on possible introduction of fresh stimulus measures by the Chinese policy makers. Back home, Finance Minister P Chidambaram asked banks to cut interest rates and keep EMIs at affordable levels to encourage sales of consumer durables that will restart the engine of manufacturing.

Initially, domestic market made flat to positive start but immediately garnered some decent gains led by rise in Infosys after a US court dismissed a lawsuit from an employee, while consumer good stocks gained on signs of improving rainfalls. Moreover, Software pack continuously provided strength to the bourses as stocks of TCS, Wipro, Infosys and HCL Technologies all edged higher on hopes of economic recovery of the US, the biggest outsourcing market for Indian IT firms. Moreover, rise in tyre companies too aided the sentiments. Afterwards, market traded in a tight band near crucial 5,400 mark as July month’s consumer prices index (CPI) data, emerged as non-event. India’s CPI inflation (base year 2010) moderated to 9.86% y-o-y in July from 9.93% in June. The moderation was mainly due to positive base effects on fuel inflation created by the hike in administered prices a year ago and a moderation in the miscellaneous category because of a decline in the cost of transportation services. But, the key benchmark succeeded in coming out of their range bound trajectory in afternoon trades and regained its crucial 5,400 mark followed by firm trade in European counters. Moreover, rise in tyre companies too aided the sentiments. Stocks like Ceat, JK Tyre & Industries, Apollo Tyres, MRF surged by 2-10 percent as lower rubber prices will boost profitability. Finally, Nifty ended the session near day’s high comfortably above its psychological 5,400 level.

Meanwhile, all the sectoral indices on the NSE were settled in the green, CNX IT remained the major gainer, up 1.75% followed by CNX Realty up 1.57% and CNX Auto up by 1.33%. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, rose 3.62% and reached 16.30.

The India VIX witnessed an addition of 3.62% at 16.30 as compared to its previous close of at 15.73 on Friday.

The 50-share S&P CNX Nifty gained 54.70points or 1.02% to settle at 5,421.00.

Nifty August 2012 futures closed at 5441.90 on Tuesday at a premium of 20.90 points over spot closing of 5,421.00, while Nifty September 2012 futures were at 5467.75 at a premium of 46.75 points over spot closing. Nifty August futures saw an addition of 0.77 million (mn) units taking the total outstanding open interest (OI) to 26.38 mn units. The near month August 2012 derivatives contract will expire on Thursday i.e. August 30, 2012.

From the most active contracts, Tata Motors August 2012 futures were at a premium of 0.10 points at 246.60 compared with spot closing of 246.50. The number of contracts traded was 12,675.

Tata Steel August 2012 futures were trading at a premium of 2.35 points at 394.35 compared with spot closing of 392.00. The number of contracts traded was 14,022.

ICICI Bank August 2012 futures were at a discount of 0.40 point at 978.10 compared with spot closing of 978.50. The number of contracts traded was 12,261.

United Spirits August 2012 futures were at a premium of 4.65 points at 984.65 compared with spot closing of 980.00. The number of contracts traded was 22,215.

SBI August 2012 futures were at a premium of 5.85 point at 1921.65 compared with spot closing of 1915.80. The number of contracts traded was 30,194. 

Among Nifty calls, 5500 SP from the August month expiry was the most active call with an addition of 0.49 million open interest.

Among Nifty puts, 5000 SP from the August month expiry was the most active put with an addition of 1.51 million open interest.

The maximum OI outstanding for Calls was at 5500 SP (9.85 mn) and that for Puts was at 5000 SP (10.66 mn).

The respective Support and Resistance levels are: Resistance 5441.22 -- Pivot Point 5404.96 -- Support 5384.73.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.77 for August -month contract.

The top five scrips with highest PCR on OI were Orient Bank 4.00, M&M2.33, PTC 1.75, Ambuja Cement 1.72 and Hindunilvr 1.60.