Nifty witnesses triple digit rally supported by software stocks

The local benchmark, Nifty witnessed an exceptional day of trade on Tuesday and reclaimed its crucial 5,100 level after hitting a triple digit rally. However, benchmark witnessed a terrific run throughout the day’s trade and garnered gain of over two percent. However, global sentiments remained subdued after Standard & Poor’s downgraded Italy’s credit rating to A from A+ with a negative outlook, exacerbated concerns that Europe’s debt crisis is spreading. Earlier, Indian equity market witnessed flat start amid weak global cues but, immediately started its northward journey and garnered a gain of about a percentage point capturing its crucial 5,050 mark in initial trade supported by software space on the domestic front. IT space leads the rally as rupee hits 2-year low, stocks viz., Wipro, Infosys, TCS and HCL Tech all snapped the day’s trade with a gain of 2-4 percent. Afterwards, benchmark traded in the tight band till early noon trade comfortably over its crucial 5,050 mark. In the mid afternoon trade, the index extended its jubilant mood and regained its crucial 5,100 mark as European counterparts regained their strength after a dismal opening on hopes that Greece won’t default on its debt. After that, the domestic index continued its rally till end. Finally, Nifty snapped the day’s trade near its intraday high with a gain of over 100 points led by strong gains in Anil Dhirubhai Ambani Group (ADAG) companies. Stocks of Reliance Infra, Reliance Communications, Reliance Mediaworks and Reliance Power soared by 2-5 percent in the trade.

On the global front, the US market closed lower on Monday, snapping a five-session winning streak after a choppy session. However, most of the Asian equity indices finished the day’s trade in the positive terrain on Tuesday after a subdued opening as short-covering witnessed in most of the Asian peers. All the European counterparts were trading on a positive zone where major indices like CAC, DAX and FTSE were trading with a gain of 1-2.5 percent at this point of time. Back home, broad-based buying supported all sectoral indices on the NSE barring CNX PSE to settle in the positive territory with CNX IT surging the most and ending with a gain of 3.12% followed by CNX PSU Bank up 2.72% and CNX Service up 2.54% while CNX PSE down by 0.09%. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, crumbled 7.94% and reached 27.25, while S&P Nifty moved higher by 108.25 points or 2.15% to close at 5,140.20.

The India VIX decreased by 7.94% at 27.25 as compared to its previous close of 29.60 on Monday.

The 50-share S&P CNX Nifty gained 108.25 points or 2.15% and settled at 5,140.20.

Nifty September 2011 futures closed at 5,167.00 at a premium of 26.80 points over spot closing of 5,140.20, while Nifty October 2011 futures were at 5,180.00 at a premium of 39.80 points over spot closing. The near month September 2011 derivatives contract expires on Thursday, September 29, 2011. Nifty September futures saw addition of 7.97% or 1.89 million (mn) units, taking the total outstanding open interest (OI) to 25.68 mn units.

From the most active contract by contract value, SBI’s September 2011 futures were at a discount of 0.80 point at 1996.20 compared with spot closing of 1997.00. The number of contracts traded was 34,689.

RIL September 2011 futures were at a premium of 3.25 point at 855.35 compared with spot closing of 852.10. The number of contracts traded was 27,177.

L&T September 2011 futures were at a premium of 6.85 point at 1570.95 compared with spot closing of 1564.10. The number of contracts traded was 12,916.

Infosys September 2011 futures were at a premium of 1.95 point at 2437.15 compared with spot closing of 2435.20. The number of contracts traded was 13,319.

ICICI Bank September 2011 futures were at a premium of 1.85 point at 888.70 compared with spot closing of 886.85. The number of contracts traded was 17,457. 

Among Nifty calls, 5100 SP from the September month expiry was the most active call with a decline of 0.55 million or 10.13%.

Among Nifty puts, 5100 SP from the September month expiry was the most active put with addition of 1.90 million or 50.30%.

The maximum Call OI outstanding for Calls was at 5100 SP (4.93 mn) and that for Puts was at 5000 SP (5.67 mn).

The respective Support and Resistance levels are: Resistance 5181.65-- Pivot Point 5108.45-- Support 5067.00.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.50 for September-month contract.

The top five scrips with highest PCR on OI were United Spirits 4.00, Kotak Bank 2.61, Siemens 2.18, Reliance 1.44 and Hero Motocorp 1.31.

Among most active underlying, witnessed an addition of 3.91% of Open Interest (OI) in the September month futures contract followed by RIL witnessed an addition of 3.07% of Open Interest (OI) in the near month contract. Meanwhile ICICI Bank and Tata Motors witnessed an addition of 7.04% and 19.70% of OI respectively in the September month futures. Also, ONGC witnessed an addition of 36.32% of Open Interest (OI) in the September month contract.