Bargain-hunting helps Nifty to regain crucial 5,600 mark

After previous session’s bloodbath, bulls retaliate back to a certain extent snapping the erratic day of trade in a great fashion by garnering gains of about half a percent as investors kept themselves busy in buying beaten down fundamentally strong stocks. Global cues too supported the sentiments as Asian equities ended mostly in the green with Tokyo rebounding from the previous day’s losses as dealers digested the Bank of Japan's latest stimulus push. Meanwhile, South Korean industrial production data and earnings reports from some regional companies also helped markets to extend the gains. European counters too traded with notable gains in the early session on Tuesday on word of a deal reached between the Greek government negotiators and its Troika of creditors - the European Commission, the European Central Bank and the International Monetary Fund.

Back home, Indian index opened the session on a muted note as some anxiety was witnessed in early deals after Parthasarathi Shome committee, set up to re-examine the General Anti-Avoidance Rules (GAAR) proposed by former finance minister Pranab Mukherjee in this year's budget, reportedly presented its final recommendations to current finance minister P Chidambaram today, the outcome of which would be public by November 1, 2012. The benchmark traded near its pre-close level till first half. But, the benchmark witnessed a sharp up-move in second half, which led index beyond psychological 5,600 mark helping to regain most part of the ground lost in previous session’s brutal sell-off. The sentiments also got support from banking stocks, which rose on account of short covering. They had witnessed huge selling yesterday on the back of Reserve Bank's new provisioning norms for restructured assets. PSU lenders - State Bank of India and Punjab National Bank - traded with over 1 percent gains. Media shares also aided the sentiments as stocks like TV18 Broadcast, BAG Films, Network 18 Media, Sun TV Network and Zee Entertainment all edged higher as the deadline for cable operators to switch to digital TV ends today, October 31, 2012, in Delhi, Mumbai, Kolkata and Chennai. Finally, Nifty ended the session recapturing 5,600 level with a gain of about half a percent.

Meanwhile, most of the sectoral indices on the NSE were settled in the green, CNX Media remained the major gainer, up 3.96% followed by CNX Pharma up 1.81%, CNX PSU Bank up 1.56% and CNX Auto up by 1.54% while CNX PSE and CNX Energy declined 0.51% and 0.21% respectively remained the top losers in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, tumbled 5.08% and reached 14.40.

The India VIX witnessed contraction of 5.08% at 14.40 as compared to its previous close of at 15.17 on Tuesday.

The 50-share S&P CNX Nifty gained 21.80 points or 0.39% to settle at 5,619.70.

Nifty November 2012 futures closed at 5646.10 on Wednesday at a premium of 26.40 points over spot closing of 5,619.70, while Nifty December 2012 futures ended at 5678.40, at a premium of 58.70 points over spot closing. Nifty November futures saw contraction of 0.0.40 million (mn) units taking the total outstanding open interest (OI) to 17.50 mn units. The near month November 2012 derivatives contract will expire on November 29, 2012.

From the most active contracts, Tata Motors November 2012 futures were trading at a premium of 2.00 at 256.50 compared with spot closing of 254.50. The number of contracts traded was 10,517.

DLF November 2012 futures were trading at a premium of 1.50 at 203.85 compared with spot closing of 202.35. The number of contracts traded was 11,692.

LIC Housing Finance November 2012 futures were at a premium of 1.80 point at 245.20 compared with spot closing of 243.40. The number of contracts traded was 14,084.

Tata Steel November 2012 futures were at a premium of 4.15 point at 395.10 compared with spot closing of 390.95. The number of contracts traded was 10,034.

United Spirits November 2012 futures were at a premium of 6.45 point at 1187.70 compared with spot closing of 1181.25. The number of contracts traded was 19,148. 

Among Nifty calls, 5900 SP from the November month expiry was the most active call with an addition of 0.35 million open interest.

Among Nifty puts, 5300 SP from the November month expiry was the most active put with an addition of 0.09 million open interest.

The maximum OI outstanding for Calls was at 5900 SP (5.89 mn) and that for Puts was at 5300 SP (5.30 mn).

The respective Support and Resistance levels are: Resistance 5635.05 -- Pivot Point 5609.05 -- Support 5593.7.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.02 for November -month contract.

The top five scrips with highest PCR on OI were GUJ Fluoro 8.14, Tata Comm 3.00, Maruti 1.52, Adani Ports 1.40, and Grasim 1.33.

Among most active underlying, IFCI witnessed contraction of 0.96 million of Open Interest in the November month futures contract followed by Unitech which witnessed an addition of 1.92 million of Open Interest in the near month contract. Meanwhile, Jaiprakash Associates witnessed an addition of 0.93 million in the November month futures. Also, RCOM witnessed an addition of 0.76 million in Open Interest in the November month contract. Finally, Tata Motors witnessed an addition of 0.11 million of Open Interest in the near month futures contract.