Nifty ends higher ahead of ECB meet

Domestic index S&P CNX Nifty snapped the day’s trade on a slightly higher note amid investors adopting a cautious approach ahead of the much-awaited ECB policy meeting later in the day. On the global front, European shares notched higher on reports that the European Central Bank will buy unlimited amounts of short-term sovereign bonds to cap surging borrowing costs in indebted euro zone states. While, most of the Asian counters shut shop in the green on the back of bargain-hunting following two days of losses due to batch of weak manufacturing data that fuelled concerns over the global economy. Back home, public sector oil marketing companies edged higher triggered by hopes that the prices of petrol, diesel and LPG may be hiked next week after Finance Ministry told the Petroleum Ministry that it has no funds left to subsidize fuels.

Initially, market kick started the session on cautious note investors stayed away from making any big bets ahead of a meeting of European Central Bank today evening. Afterwards, the index traded range bound near its pre-close level till early noon trade awaiting development in Europe markets. But once the European counters opened on firm note, domestic benchmark too followed the same path and started moving northward. The sentiments also got support from software stocks, which surged after the rupee dropped to its lowest level in three weeks against the dollar in late trade. Stocks like Wipro, TCS, Infosys and HCL Technology rose by 1-5 percent. Market breached its crucial 5,250 mark in late trade as sentiments got some support from Auto sector, which rose on buzz that the government may not go for slapping an additional tax on diesel cars instead it is thinking of hiking the prices of diesel to generate revenues. However, in the final hour of trade the benchmark pared most of gains on the back of profit booking as investors were awaiting outcome from ECB meeting. Finally, Nifty ended the trade with slender gains of just over 10 points.

Meanwhile, most of the sectoral indices on the NSE were settled in the green, CNX IT remained the major gainer, up 2.46% followed by CNX Media up 1.60% and Bank Nifty up by 0.66% while CNX FMCG and CNX Infra declined 1.72% and 0.57% in the trade, respectively. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 0.18% and reached 16.98.

The India VIX witnessed contraction of 0.18% at 16.98 as compared to its previous close of at 17.01 on Wednesday.

The 50-share S&P CNX Nifty gained 12.70 points or 0.24% to settle at 5,238.40.Nifty September 2012 futures closed at 5261.10 on Thursday at a premium of 22.70 points over spot closing of 5,238.40, while Nifty October 2012 futures were at 5289.65 at a premium of 51.25 points over spot closing. Nifty September futures saw contraction of 0.94 million (mn) units taking the total outstanding open interest (OI) to 17.80 mn units. The near month September 2012 derivatives contract will expire on Thursday i.e. September 27, 2012.

From the most active contracts, Tata Motors September 2012 futures were flat compared with spot closing of 233.35. The number of contracts traded was 15,023.

IDFC September 2012 futures were trading at a premium of 0.75 points at 124.85 compared with spot closing of 124.10. The number of contracts traded was 8,569.

BHEL September 2012 futures were at a premium of 1.30 point at 202.60 compared with spot closing of 201.30. The number of contracts traded was 7,902.

Bharti Airtel September 2012 futures were at a premium of 2.45 points at 253.55 compared with spot closing of 251.10. The number of contracts traded was 8,983.

Tata Steel September 2012 futures were at a premium of 1.80 point at 353.00 compared with spot closing of 351.20. The number of contracts traded was 11,326.

Among Nifty calls, 5400 SP from the September month expiry was the most active call with an addition of 0.53 million open interest.

Among Nifty puts, 5200 SP from the September month expiry was the most active put with an addition of 0.41 million open interest.

The maximum OI outstanding for Calls was at 5400 SP (7.09 mn) and that for Puts was at 5200 SP (7.32 mn).

The respective Support and Resistance levels are: Resistance 5260.11 -- Pivot Point 5238.88 --Support 5217.16.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.01 for September-month contract.

The top five scrips with highest PCR on OI were Welcorp 40.00, Federal Bank 2.00, Prajind 2.00, CESC 1.50, and Vipind 1.50.

Among the most active underlying, IFCI witnessed contraction of 2.23 million of Open Interest in the September month futures contract followed by Jaiprakash Associates which witnessed contraction of 0.92 million of Open Interest in the near month contract. Meanwhile, RCOM witnessed contraction of 0.36 million in the September month futures. Also, HDIL witnessed an addition of 0.84 million in Open Interest in the September month contract. Finally, Sterlite Industries witnessed an addition of 0.16 million of Open Interest in the near month futures contract.