Obama’s victory helps Nifty to advance for sixth straight day

Extending its gains for sixth day in a row, CNX S&P Nifty ended the session re-conquering its crucial 5,750 mark with a gain of over half a percent after Barack Obama won the US presidential election and was re-elected for the second term, lifting hopes of further quantitative easing. Global cues too remained supportive as European stocks rallied in early deals on Wednesday as the re-election of US President Barack Obama fuelled expectation the Federal Reserve’s quantitative easing will continue while, most of the Asian equity indices too shut shop in the positive trajectory. Back home, appreciation in money market too aided the sentiments as Indian rupee advanced further by 36 paise to 54.07 against the US currency on selling of dollars by banks and exporters after the greenback weakened against major world currencies.

Earlier, the Indian market made a muted start awaiting US presidential election result but gained momentum immediately after Barack Obama won a second term as the President of the United States. Afterwards, sentiments remained jubilant and Nifty recaptured its crucial 5,750 mark. Buying in rate sensitive -- banking -- too soothed the sentiments on report that the Reserve Bank of India may go for easing monetary policy as early as January. Sentiments gained some more ground as sentiments got some boost as realty pack gained over two and a half percent on hopes for a pickup in demand tied to the Diwali festival season in mid-November, a time considered auspicious in the country. Firm opening in European counters too aided the sentiments and Nifty touched its one month high in noon trade. However, the index witnessed strong resistance at that level and benchmark snapped the session off its day’s high. Finally, Nifty ended its crucial 5,750 mark despite mild profit booking in last leg of trade as sentiments continued to remain bullish as interest rate sensitive auto stocks rose on expectation of rate cut from the central bank in the fourth quarter of 2012-2013. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing.

Meanwhile, most of the sectoral indices on the NSE were settled in the green, CNX Realty remained the major gainer, up 2.97% followed by CNX PSU Bank up 2.68% and CNX Finance up by 1.21% while CNX Energy declined by 0.33% remained the lone loser in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, increased by 4.60% and reached 14.51.

The India VIX witnessed contraction of 4.60% at 14.51 as compared to its previous close of at 15.21 on Tuesday.

The 50-share S&P CNX Nifty gained 35.70 points or 0.62% to settle at 5,760.10.

Nifty November 2012 futures closed at 5793.25 on Wednesday at a premium of 33.15 points over spot closing of 5,760.10, while Nifty December 2012 futures ended at 5825.80, at a premium of 65.70 points over spot closing. Nifty November futures saw an addition of 0.57 million (mn) units taking the total outstanding open interest (OI) to 19.62 mn units. The near month November 2012 derivatives contract will expire on November 29, 2012.

From the most active contracts, JP Associates November 2012 futures were trading at a discount of 0.25 at 93.35 compared with spot closing of 93.60. The number of contracts traded was 14,342.

Tata Motors November 2012 futures were trading at a premium of 2.35 at 270.85 compared with spot closing of 268.50. The number of contracts traded was 16,256.

DLF November 2012 futures were at a premium of 0.85 point at 212.45 compared with spot closing of 211.60. The number of contracts traded was 14,556.

Bharti Airtel November 2012 futures were at a premium of 1.80 point at 273.40 compared with spot closing of 271.60. The number of contracts traded was 14,109.

Tata Steel November 2012 futures were at a premium of 3.00 point at 405.15 compared with spot closing of 402.15. The number of contracts traded was 11,134.

Among Nifty calls, 6000 SP from the November month expiry was the most active call with an addition of 0.92 million open interest.

Among Nifty puts, 5600 SP from the November month expiry was the most active put with  contraction of 0.06 million open interest.

The maximum OI outstanding for Calls was at 6000 SP (7.49 mn) and that for Puts was at 5600 SP (7.16 mn).

The respective Support and Resistance levels are: Resistance 5787.8 -- Pivot Point 5749.6 -- Support 57219.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.17 for November -month contract.

The top five scrips with highest PCR on OI were GUJ Fluoro 2.48, Canara Bank 1.94, Maruti 1.66, Tata Motors 1.51, and Titan 1.42.

Among most active underlying, IFCI witnessed contraction of 0.14 million of Open Interest in the November month futures contract followed by Jaiprakash Associates which witnessed an addition of 4.41 million of Open Interest in the near month contract. Meanwhile, Unitech witnessed an addition of 1.43 million in the November month futures. Also, RCOM witnessed contraction of 3.21 million in Open Interest in the November month contract. Finally, Tata Motors witnessed an addition of 0.66 million of Open Interest in the near month futures contract.