Recovery in late trade helps Nifty to end near day’s high

After a day of consolidation, domestic index S&P CNX Nifty ended the day’s trade near intraday high. Though, market traded in the red for first half of the session but, recovery in late trade led by public sector undertakings sent the index to higher level. However, global cues remained unsupportive as most Asian markets closed the shutter with negative mark as investors espoused a cautious approach ahead of FOMC meet. Moreover, European equities eased in early trade, with investors taking profits after a rally to 13-month highs on concerns about the strings that Germany may attach to the euro zone bailout fund and the chance that the United States may not deliver widely awaited stimulus.

Initially, the Indian benchmark made a soft opening weighed down by weak global markets ahead of the Federal Reserve’s policy meet that will begin today for two days and German constitutional court’s ruling over the legality of the European bailout fund on Wednesday. Afterwards, market witnessed some amount of recovery but traded lower till late morning session due to fall in metal stocks, which remained the biggest underperformers as the Goa mining ban adversely affected companies like Sesa Goa, which is country’s biggest iron ore producer in the private sector. But, in the early noon session, the benchmark pared all its initial losses and turned positive even though European counters opened in the red terrain. The recovery was triggered mainly on hopes of fuel price hike. Oil Minister Jaipal Reddy said the fuel price hike decision would be taken soon, after a meeting with Finance Minister Manmohan Singh over under-recoveries of oil marketing companies and various suggestions on fuel price hike. The index stretched further in late trade as sentiments also got some support from Pharma stocks, which rose on report that Health Ministry is working on new rules to ensure the availability of medicines at affordable prices in the local market and may put tougher conditions for foreign pharmaceutical companies looking to acquire Indian drugs businesses. Finally, Nifty snapped the day’s trade near its day’s high near its crucial 5,400 bastion.

Meanwhile, most of the sectoral indices on the NSE were settled in the green, CNX IT remained the major gainer, up 0.99% followed by CNX Realty up 0.93% and Bank Nifty up by 0.66% while, CNX Metal and CNX media lost 1.39% and 0.84% in the trade respectively. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, rose 0.72% and reached 15.38.

The India VIX witnessed an addition of 0.72% at 15.38 as compared to its previous close of at 15.27 on Monday. The 50-share S&P CNX Nifty gained 26.55 points or 0.50% to settle at 5,390.00.

Nifty September 2012 futures closed at 5405.35 on Tuesday at a premium of 15.35 points over spot closing of 5,390.00, while Nifty October 2012 futures were at 5432.85 at a premium of 42.85 points over spot closing. Nifty September futures saw an addition of 0.86 million (mn) units taking the total outstanding open interest (OI) to 17.88 mn units. The near month September 2012 derivatives contract will expire on Thursday i.e. September 27, 2012.

From the most active contracts, Reliance Communications September 2012 futures were trading at a premium of 0.45 at 51.90 compared with spot closing of 51.45. The number of contracts traded was 9,387.

Tata Motors September 2012 futures were trading at a premium of 0.35 points at 250.40 compared with spot closing of 250.05. The number of contracts traded was 14,124.

Bharat Heavy Electricals September 2012 futures were at a premium of 0.95 point at 202.00 compared with spot closing of 201.05. The number of contracts traded was 9,705.

Tata Steel September 2012 futures were at a premium of 2.05 points at 378.50 compared with spot closing of 376.45. The number of contracts traded was 8,040.

Sesa Goa September 2012 futures were at a premium of 0.55 point at 160.20 compared with spot closing of 159.65. The number of contracts traded was 10,198.  

Among Nifty calls, 5600 SP from the September month expiry was the most active call with an addition of 0.59 million open interest.

Among Nifty puts, 5200 SP from the September month expiry was the most active put with an addition of 0.97 million open interest.

The maximum OI outstanding for Calls was at 5600 SP (7.69 mn) and that for Puts was at 5200 SP (9.02 mn).

The respective Support and Resistance levels are: Resistance 5411.53 -- Pivot Point 5371.81 --Support 5350.28.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.18 for September-month contract.

The top five scrips with highest PCR on OI were Abirlanuvo 5.00, Federal Bank 3.00, Bharat Forg 2.25, TCS1.43, and Bajaj-Auto 1.14.

Among the most active underlying, IFCI witnessed an addition of 1.02 million of Open Interest in the September month futures contract followed by RCOM which witnessed an addition of 1.76 million of Open Interest in the near month contract. Meanwhile, JP Associaties witnessed an addition of 0.32 million in the September month futures. Also, Unitech witnessed contraction of 1.97 million in Open Interest in the September month contract. Finally, Hindalco witnessed contraction of 0.35 million of Open Interest in the near month futures contract.