Recovery in late trade helps Nifty to hold crucial 5,700 mark

Domestic index S&P CNX Nifty, after struggling throughout the day’s trade, finally negotiated a positive close with holding its crucial 5,700 mark amid a positive trend in European counters. Shares in European markets were trading with a gain of over a percent as investors increased their exposure to cyclical sectors such as banks and miners. The investors also welcomed the results of stress test on the Spanish banking sector as it matched the street expectations. However, Asian markets shut shop mostly in the red as weak manufacturing data from China and continued concerns over debt-ridden Spain dampened the sentiments. Back home, the much awaited Kelkar Committee report was made public on Sept 28. The panel in its report has said that fiscal deficit can be reined in at 5.2% of GDP for the current financial year - but only if subsidies are cut.

Initially, the Indian benchmark opened flat and meandered in a narrow range near its pre-close level till first half as traders remained on the sideline awaiting the Parthasarthi Shome panel’s final report on GAAR and also its recommendations on retrospective amendments. Shome is likely to submit the report to Finance Minister P Chidambaram today. The sentiments also got dampened after India’s merchandise exports fell by nearly 10% in August to $22.3 billion while imports fell by 5% to $38 billion. Moreover, India’s purchasing managers’ index (PMI) too was unable to give any boost to the bourses as manufacturing activity remained more or less steady in September compared to the previous month, though export orders and output saw healthy gains. The HSBC manufacturing PMI stood at 52.8 in September, unchanged from August, which was a nine-month low. But, in the late trade, market gained strength recapturing its crucial 5,700 mark following firm European counters. Moreover, renewed buying in software pack too supported the sentiments as scrips like Infosys, TCS, Wipro, HCL Technologies and MphasiS edged higher after recent declines. However, gains remain capped after metal stocks declined as China’s manufacturing shrank for the second month in a row in September 2012 as per a Chinese government survey. Finally, market ended the session with marginal gains of fifteen points.

Meanwhile, most of the sectoral indices on the NSE were settled in the green, CNX IT remained the major gainer, up 1.93% followed by CNX Media up 1.36% and CNX Auto up by 0.70% while, Bank Nifty lost 0.32% remained lone loser in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, rose 1.11% and reached 16.34.

The India VIX witnessed an addition of 1.11% at 16.34 as compared to its previous close of at 16.16 on Friday.

The 50-share S&P CNX Nifty gained 15.50 points or 0.27% to settle at 5,718.80.

Nifty October 2012 futures closed at 5754.15 on Monday at a premium of 35.35 points over spot closing of 5,718.80, while Nifty November 2012 futures were at 5782.90 at a premium of 64.10 points over spot closing. Nifty October futures saw an addition of 0.61 million (mn) units taking the total outstanding open interest (OI) to 24.28 mn units. The near month October 2012 derivatives contract will expire on October 25, 2012.

From the most active contracts, JP Associates October 2012 futures were trading at a discount of 0.65 at 85.65 compared with spot closing of 86.30. The number of contracts traded was 9,031.

Tata Motors October 2012 futures were trading at a premium of 1.05 at 275.50 compared with spot closing of 274.45. The number of contracts traded was 12,061.

DLF October 2012 futures were at a premium of 1.75 point at 230.65 compared with spot closing of 228.90. The number of contracts traded was 10,251.

Tata Steel October 2012 futures were at a premium of 1.30 point at 400.35 compared with spot closing of 399.05. The number of contracts traded was 16,905.

JSW Steel October 2012 futures were at a premium of 3.80 point at 738.80 compared with spot closing of 735.00. The number of contracts traded was 10,734. 

Among Nifty calls, 6000 SP from the October month expiry was the most active call with an addition of 0.64 million open interest.

Among Nifty puts, 5300 SP from the October month expiry was the most active put with an addition of 0.08 million open interest.

The maximum OI outstanding for Calls was at 6000 SP (5.24 mn) and that for Puts was at 5300 SP (5.59 mn).

The respective Support and Resistance levels are: Resistance 5729.83 -- Pivot Point 5711.91 --Support 5700.88.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.23 for October - month contract.

The top five scrips with highest PCR on OI were ITC 1.68, PNB 1.49, Jindal Steel 1.36, Union Bank 1.25, and GUJ Fluoro 1.14.

Among the most active underlying, IFCI witnessed contration of 0.91 million of Open Interest in the October month futures contract followed by Jaiprakash Associates, which witnessed an addition of 4.72 million of Open Interest in the near month contract. Meanwhile, RCOM witnessed an addition of 1.94 million in the October month futures. Also, Sterlite Industries witnessed contraction of 0.23 million in Open Interest in the October month contract. Finally, Tata Motors witnessed contraction of 0.14 million of Open Interest in the near month futures contract.