Market shows decent recovery; Nifty re-conquers 5,700 mark

Snapping a two-day continues fall, NSE benchmark index S&P CNX Nifty ended the session with a gain of half a percent re-conquering crucial 5,700 level, as investors opted to buy fundamentally strong stocks. The sentiments also got some boost after US Treasury Secretary Timothy Geithner in New Delhi, describing India’s recent reforms initiatives as very promising, said it would have positive outcomes for the Indian economy. However, the gains remain capped as European counters gave up early gains and turned negative in early deals on Tuesday as persistent concerns over a slowdown in global growth and its impact on corporate earnings weighed on investors sentiment. While, Asian markets ended mixed on Tuesday with the Euro zone’s debt worries impact getting limited. The mainland China’s shares gained sharply because of rise in iron ore prices, which helped resource companies to a great extent.

Initially, the benchmark made a gap-up start despite a sharp downward revision in India’s 2012 growth forecast by the International Monetary Fund (IMF). It expects India’s GDP for 2012 at 4.9 per cent, perhaps the most pessimistic growth outlook by a global body. IMF lowered its forecast despite the government unleashing a series of reforms to attract foreign investment and boost business sentiment in the country. The index continued to trade with traction till early noon session supported by software counters, which rose to near a percent after the Indian rupee fell to a one-week low on October 8, 2012, and posted its biggest single-day fall in three months. But, sentiments got dampened and investors started booking profits amid weakness in European counters and Indian benchmark touched its intraday low near pre-close level. Meanwhile, telecom stocks fell up to 4 percent after an Empowered Group of Ministers recommended a one-time fee on existing operators for spectrum they hold beyond 4.4 MHz. The index regained strength in the dying hours as buying in FMCG space supported the sentiments as stocks like Marico, HUL and Gillette India edged higher on favourable outlook for Rabi or winter crop following wide-spread rains in August and September. Finally, Nifty managed to close above its crucial 5,700 bastion with a gain of half a percent.

Most of the sectoral indices on the NSE closed in green, CNX Pharma was the top gainer up by 1.49%, CNX FMCG gained 1.09%, CNX IT was up by 1.08%, CNX MNC was up by 0.88%, Bank Nifty gained 0.74% and CNX Realty gained 0.58%. On the other hand, CNX Energy down by 0.36% and CNX Auto down by 0.19% were the losers. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, decline 2.15% and reached 16.80.

The India VIX witnessed contraction of 2.15% at 16.80 as compared to its previous close of at 17.17 on Monday.

The 50-share S&P CNX Nifty gained 28.60 points or 0.50% to settle at 5,704.60.

Nifty October 2012 futures closed at 5723.90 on Tuesday at a premium of 19.30 points over spot closing of 5,704.60, while Nifty November 2012 futures were at 5755.40 at a premium of 50.80 points over spot closing. Nifty October futures saw contraction of 0.03 million (mn) units taking the total outstanding open interest (OI) to 26.29 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 1.50 at 271.05 compared with spot closing of 269.55. The number of contracts traded was 13,586.

HDIL October 2012 futures were trading at a discount of 0.10 at 103.90 compared with spot closing of 104.00. The number of contracts traded was 13,302.

DLF October 2012 futures were at a premium of 1.60 point at 225.40 compared with spot closing of 223.80. The number of contracts traded was 16,721.

Tata Steel October 2012 futures were at a premium of 2.15 point at 413.75 compared with spot closing of 411.60. The number of contracts traded was 14,861.

United Spirits October 2012 futures were at a premium of 6.50 point at 1269.60 compared with spot closing of 1263.10. The number of contracts traded was 17,205. 

Among Nifty calls, 5800 SP from the October month expiry was the most active call with an addition of 0.31 million open interest.

Among Nifty puts, 5600 SP from the October month expiry was the most active put with an addition of 0.32 million open interest.

The maximum OI outstanding for Calls was at 5800 SP (7.32 mn) and that for Puts was at 5600 SP (6.42 mn).

The respective Support and Resistance levels are: Resistance 572953 -- Pivot Point 5703.71 --Support 5678.78.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.03 for October - month contract.

The top five scrips with highest PCR on OI were ITC 1.76, Union Bank 1.21, PNB 1.21, Infosys 1.08 and SBI 1.06.

Among the most active underlying, IFCI, witnessed contraction of 1.12 million of Open Interest in the October month futures contract followed by JP Associates, which witnessed an addition  of 0.93 million of Open Interest in the near month contract. Meanwhile, RCOM witnessed contraction of 0.34 million in the October month futures. Also, NHPC witnessed an addition of 3.46 million in Open Interest in the October month contract. Finally, HDIL witnessed an addition of 3.28 million of Open Interest in the near month futures contract.