Bulls make spectacular comeback; Nifty surpasses 5,700 level

Bulls made spectacular comeback, after three days of consolidation, holding their control throughout the day’s trade on Friday with Nifty garnering gain of about a percent and ending the remarkable day of trade over its crucial 5,700 level supported by most of the sectoral indices on the NSE with media, auto and pharma leading the up-move. Global cues remained supportive as most of the Asian indices ended the session in the green as Euro-zone debt worries were eased after Spain unveiled swingeing cuts in a budget that is expected to pave the way for a bailout. European counters too were trading higher in early deals. Back home, the undertone remained upbeat on optimism that the government will carry on its reforms agenda forward in the coming days and weeks. Corporate confidence also improved on the back of slew of reforms announced by the government lately.

Earlier, the market made a gap-up opening buoyed by supportive global cues as all the Asian peers, barring Japanese Nikkei opened in the green terrain. Afterwards, Nifty extended its gains surpassing crucial 5,700 mark as sentiment got support on government’s decision of no extra borrowing in the current year. The finance ministry asserted its commitment to containing fiscal deficit by sticking to its borrowing target and said that government will borrow Rs 2 lakh crore in the remaining period of the current fiscal to stick to the target of 5.1 per cent of the Gross Domestic Product. Continued buying in Media and Auto space too aided the sentiments. Media and Entertainment companies were on a roll with most of the stocks from the sector traded at their 52-week highs on expectation of higher subscription revenues due to digitisation. Zee Entertainment Enterprises, Sun TV Network, New Delhi Television (NDTV), TV Today and Zee News all edged higher while, Auto shares went up on hopes that sales growth would pick up in October ahead of the festive season. However, slight profit booking was seen in late trade after the release of core sector number, which failed to emerge as a positive trigger for equity market as eight core industries grew at a slower pace of 2.1 percent in August, as against 3.8 percent in the same month last year due to negative growth in crude oil, natural gas, fertilizer and cement. But, domestic index kept its cool and held its crucial 5,700 level till end, as some support came in from buying in Tata Group companies, which rose across the board following reports that US coffee chain Starbucks Corp. will open its first coffee shop in India in joint venture with Tata Coffee by the end of October 2012 and has named Avani Saglani Davda, a Tata Group executive, as chief executive of the joint venture. Finally, Nifty ended the session at its highest level in more than 14-1/2 months with a gain of about a percent.

Meanwhile, most of the sectoral indices on the NSE were settled in the red, CNX Media remained the major gainer, up 3.75% followed by CNX Auto up 1.67% and CNX Pharma up by 1.52% while CNX Realty declined 0.69% remained the lone loser in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 4.44% and reached 16.16.

The India VIX witnessed contraction of 4.44% at 16.16 as compared to its previous close of at 16.91 on Thursday.

The 50-share S&P CNX Nifty gained 53.80 points or 0.95% to settle at 5,703.30.

Nifty October 2012 futures closed at 5729.55 on Friday at a premium of 26.25 points over spot closing of 5,703.30, while Nifty November 2012 futures were at 5756.85 at a premium of 53.55 points over spot closing. Nifty October futures saw an addition of 1.84 million (mn) units taking the total outstanding open interest (OI) to 23.67 mn units. The near month October 2012 derivatives contract will expire on October 25, 2012.

From the most active contracts, Tata Motors October 2012 futures were trading at a premium of 1.35 at 268.40 compared with spot closing of 267.05. The number of contracts traded was 17,456.

DLF October 2012 futures were trading at a premium of 1.25 at 234.45 compared with spot closing of 233.20. The number of contracts traded was 12,831.

Tata Steel October 2012 futures were at a premium of 1.80 point at 402.15 compared with spot closing of 400.35. The number of contracts traded was 20,443.

United Spirits October 2012 futures were at a discount of 4.70 point at 1,225.30 compared with spot closing of 1,230.00. The number of contracts traded was 12,617.

JSW Steel October 2012 futures were at a premium of 1.40 point at 758.40 compared with spot closing of 757.00. The number of contracts traded was 10,869. 

Among Nifty calls, 6000 SP from the October month expiry was the most active call with an addition of 10.75 million open interest.

Among Nifty puts, 5300 SP from the October month expiry was the most active put with an addition of 0.43 million open interest.

The maximum OI outstanding for Calls was at 6000 SP (4.59 mn) and that for Puts was at 5300 SP (5.51 mn).

The respective Support and Resistance levels are: Resistance 5731.15 -- Pivot Point 5707.3 --Support 5679.45.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.25 for October - month contract.

The top five scrips with highest PCR on OI were ITC 1.71, PNB 1.71, Gujarat Fluoro Chemicals 1.43, Jindal Steel 1.16, and HUL 1.08.

Among the most active underlying, IFCI witnessed an addition of 0.41 million of Open Interest in the October month futures contract followed by RCOM, which witnessed an addition of 1.30 million of Open Interest in the near month contract. Meanwhile, Jaiprakash Associates witnessed contraction of 0.05 million in the October month futures. Also, Unitech witnessed an addition of 0.56 million in Open Interest in the October month contract. Finally, Sterlite Industries (India) witnessed contraction of 1.08 million of Open Interest in the near month futures contract.