Nifty snaps nine days downfall; regains 5,600 level

Snapping its eight consecutive session of downfall, CNX S&P Nifty ended the session with a gain of over three forth of percent as investors went for bargain hunting. However, global cues remained unsupportive as Asian markets ended mixed on Wednesday as investors were still worried over euro zone debt crisis after European officials failed to reach a deal on a bailout for Greece. Meanwhile, European counters lost steam in early deals on fresh worries over Greece after international lenders failed to reach a deal for the payment of a new tranche of aid to the debt-stricken country. Back home, the index showed some fervor in the session and regained its crucial 5,600 mark as market participants hunted for badly beaten down but fundamentally strong bets.

Initially, Indian benchmark made a cautious start as investors remained on sidelines ahead of the winter session of Parliament but, sentiments got support as stocks of private sector banks rose after the government announced that it will table the Banking Laws Amendment Bill, 2011 in the winter session of parliament which will begin from November 22, 2012. Meanwhile, retail stocks were on buyers’ radar on hopes that FDI issue may get resolved in the winter session of Parliament. In the late trade, market strengthened further and reclaimed 5,600 mark supported by Pharmaceuticals stocks, which rallied ahead of GoM decision for resolving deadlock on Pharma pricing. The GOM meet for resolving deadlock assumes importance with the expected attendance of the finance minister, where hopes are high that the pricing policy, which has been mired since 2003, will be revamped. Some amount of support also came in from public sector oil marketing companies as stocks like BPCL, HPCL and IOC edged higher after international crude reversed most of its last session gains on Tuesday and plunged sharply as supply concern eased on report that Israel and Palestinians were near a truce. Finally, Nifty ended the session near its intraday high with a gain of over 40 points.

Meanwhile, most of the sectoral indices on the NSE were settled in the green, CNX Realty remained the top gainer, up 2.58% followed by CNX Media up 1.67% and CNX FMCG up by 1.38% while CNX PSE and CNX Auto down 0.38% and 0.05% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined by 2.21% and reached 15.46.

The India VIX witnessed contraction of 2.21% at 15.46 as compared to its previous close of at 15.81 on Tuesday.

The 50-share S&P CNX Nifty gained 43.25 points or 0.78% to settle at 5,614.80.

Nifty November 2012 futures closed at 5622.1 on Wednesday at a premium of 7.3 points over spot closing of 5,614.80, while Nifty December 2012 futures ended at 5653.6, at a premium of 38.8 points over spot closing. Nifty November futures saw contraction of 0.16 million (mn) units taking the total outstanding open interest (OI) to 13.91 mn units. The near month November 2012 derivatives contract will expire on November 29, 2012.

From the most active contracts, Jaiprakash Associates November 2012 futures were trading at a premium of 0.55 at 89.15 compared with spot closing of 88.60. The number of contracts traded was 14,165.

Tata Motors November 2012 futures were trading at a premium of 1.85 at 266.35 compared with spot closing of 264.50. The number of contracts traded was 12,194.

BHEL November 2012 futures were at a discount of 0.10 point at 221.05 compared with spot closing of 221.15. The number of contracts traded was 10,246.

DLF November 2012 futures were at a premium of 1.00 point at 202.6 compared with spot closing of 201.60. The number of contracts traded was 11,841.

Tata Steel November 2012 futures were at a premium of 1.10 point at 365.65 compared with spot closing of 364.55. The number of contracts traded was 9,217.

Among Nifty calls, 5,800 SP from the November month expiry was the most active call with  an addition  of 0.25 million open interest.

Among Nifty puts, 5,500 SP from the November month expiry was the most active put with an addition of 1.72 million open interest.

The maximum OI outstanding for Calls was at 5800 SP (8.58 mn) and that for Puts was at 5500 SP (8.72 mn).

The respective Support and Resistance levels are: Resistance 5636.2 -- Pivot Point 5598.8 -- Support 5577.4.

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

The top five scrips with highest PCR on OI were Welcorp 11.54, Abirlanuvo 2.00, M&M 1.90, Maruti 1.75 and Titan 1.53.

Among most active underlying, NHPC witnessed contraction of 1.50 million of Open Interest in the November month futures contract followed by Unitech which witnessed contraction of 1.80 million of Open Interest in the near month contract. Meanwhile, Jaiprakash Associates witnessed contraction of 0.86 million in the November month futures. Also, RCOM witnessed an addition of 1.83 million in Open Interest in the November month contract. Finally, Hindalco Industries witnessed contraction of 1.49 million of Open Interest in the near month futures contract.