Nifty re-conquers 5,700 mark; Infosys Q2 numbers eyed

After trading choppy for most part of the day’s trade, the 50-share NSE Nifty re-conquered its crucial 5,700 level quite nicely on the back of late hour recovery following Finance Minister P Chidambaram’s comment that there is no serious threat of a ratings downgrade after the rating agency Standard & Poor’s warned about a significant chance of cutting India’s credit rating in the future. He also said that government is taking threat of ratings downgrade seriously and will implement many reforms over 1.5 years. Moreover, recovery in European markets, after a negative opening, also supported the sentiments. Though, most Asian markets closed lower on Thursday as Standard & Poor’s downgraded Spain’s credit rating which overshadowed an upbeat assessment of the US economy by the Federal Reserve.

Back home, market kick started the session in red as investors preferred to stay away from piling up positions in equities ahead of earnings from IT titan Infosys and housing finance major HDFC on Oct 12. The market continued to trade below its pre-close mark as Indian exports dropped by 10.78% in the month of September after falling 9.74% in the month of August. Meanwhile, the trade deficit widened to $18080.38 million, up by huge 37.03% from $13194.87 million in same month last year. It seemed to be a choppy session but, recovery in last leg of trade, following firmness in European counters, helped domestic index to reclaim its crucial 5,700 mark. The bounce back was also supported by report that Cabinet Committee on Economic Affairs (CCEA) agreed to hike the prices of urea-based fertilizers by Rs 50 per tonne, thereby reducing government’s fertilizer subsidy bill, estimated to touch Rs 65,000 crore this fiscal year. Strengthening rupee too aided the sentiments. The Indian rupee appreciated 26.50 paise to 52.78 against the US dollar at the time of equity market closing. The benchmark also got major support from Realty and Infra counters, which witnessed buying at lower levels after witnessing a sharp sell-off in the previous sessions. Finally, Nifty ended the session near its intraday high with a gain of about a percentage point.

Meanwhile, most of the sectoral indices on the NSE settled in green, CNX Realty remained the major gainer, up 4.85% followed by CNX PSU Bank up 2.24%, CNX Infra up 2.02%, CNX Metal up 1.62% and Bank Nifty up by 1.24%. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 2.02% and reached 16.49.

The India VIX witnessed contraction of 2.02% at 16.49 as compared to its previous close of at 16.83 on Wednesday.

The 50-share S&P CNX Nifty gained 52.90 points or 0.99% to settle at 5,708.05.

Nifty October 2012 futures closed at 5739.35 on Thursday at a premium of 31.30 points over spot closing of 5,708.05, while Nifty November 2012 futures were at 5770.15 at a premium of 62.10 points over spot closing. Nifty October futures saw contraction of 0.23 million (mn) units taking the total outstanding open interest (OI) to 25.36 mn units. The near month October 2012 derivatives contract will expire on October 25, 2012.

From the most active contracts, Unitech October 2012 futures were trading at a premium of 0.10 at 27.35 compared with spot closing of 27.25. The number of contracts traded was 13,960.

JP Associates October 2012 futures were trading at a premium of 0.05 at 90.70 compared with spot closing of 90.65. The number of contracts traded was 14,440.

Tata Motors October 2012 futures were at a premium of 0.45 point at 274.85 compared with spot closing of 274.40. The number of contracts traded was 13,531.

DLF October 2012 futures were at a premium of 1.30 point at 222.30 compared with spot closing of 221.00. The number of contracts traded was 14,813.

Tata Steel October 2012 futures were at a premium of 1.95 point at 422.95 compared with spot closing of 421.00. The number of contracts traded was 23,099.

Among Nifty calls, 5800 SP from the October month expiry was the most active call with an addition of 0.62 million open interest.

Among Nifty puts, 5600 SP from the October month expiry was the most active put with an addition of 0.63 million open interest.

The maximum OI outstanding for Calls was at 5800 SP (8.31 mn) and that for Puts was at 5600 SP (7.02 mn).

The respective Support and Resistance levels are: Resistance 5740.45 -- Pivot Point 5688.7 --Support 5656.3.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.96 for October - month contract.

The top five scrips with highest PCR on OI were ITC 1.67, Sun Pharma 1.47, PNB 1.45, Infosys 1.18, Maruti 1.01 and HUL 0.97.

Among the most active underlying, IFCI, witnessed  an addition  of 0.12 million of Open Interest in the October month futures contract followed by JP Associates, which witnessed an addition  of 1.59 million of Open Interest in the near month contract. Meanwhile, Unitech witnessed an addition of 12.36 million in the October month futures. Also, RCOM witnessed an addition of 0.18 million in Open Interest in the October month contract. Finally, Shree Renuka Sugars witnessed an addition of 0.43 million of Open Interest in the near month futures contract.