Nifty extends gain for second consecutive session on failure of TMC’s no-confidence motion

Prolonging its gains for second day in a row, Indian benchmark Nifty ended the session in the green. The failure of former UPA ally the Trinamool Congress (TMC) to bring a no-confidence motion against the government in the Lok Sabha today over FDI in retail also helped improve sentiment. The global cues too remained supportive as Asian markets ended mostly in the green as Chinese manufacturing data indicated that the economy continues to pick up. The purchasing managers’ index came out at 50.4, compared with a final reading of October at 49.5, indicating an expansion for the first time in 13 months. Moreover, Japanese shares rose to six-month high as the yen weakened further against the dollar and euro on expectations that the country's central bank will unveil fresh monetary easing measures. Meanwhile, European counters too were trading in the green at this point of time on hopes that a deal on Greece’s bailout will be agreed.

Initially, Indian benchmark opened on a positive note tracking the global markets which were in the green on hopes that European leaders are likely to reach a deal to release emergency funds to Greece. Back home, the undertone remained up-beat after the government allowed India’s largest insurer Life Insurance Corporation (LIC) to invest up to 30 percent in a company as against the earlier limit of 10 percent. Moreover, buying interest in banking space also pushed the indices higher in early trade. State run public bank and also index heavyweight, State Bank of India (SBI) scooped up gains on likely capital infusion. Banking Secretary reported that the State Bank of India would get funds under capital infusion plan. However, the benchmarks were unable to sustain their early gains and began a gradual descent touching its intraday low near its crucial 5,600 level. But, the index regained strength on positive opening of the European indices. The inability of the Trinamool Congress to muster sufficient numbers for a no-confidence motion against the UPA government also supported sentiments. The gains helped the benchmark to touch its intraday high in the post-noon session. But, profit booking at the higher levels, resulted the market paring part of its gains in the last hour, albeit closing in the green.

Meanwhile, most of the sectoral indices on the NSE were settled in the green, CNX PSU Bank remained the top gainer, up 1.33% followed by CNX Media up 0.89% and CNX IT and CNX Infra up by 0.73% each while CNX Energy and CNX Auto down 0.35% and 0.19% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined by 3.56% and reached 14.91.

The India VIX witnessed contraction of 3.56% at 14.91 as compared to its previous close of at 15.46 on Wednesday.

The 50-share S&P CNX Nifty gained 12.95 points or 0.23% to settle at 5,627.75.

Nifty November 2012 futures closed at 5640.45 on Thursday at a premium of 12.7 points over spot closing of 5,627.75, while Nifty December 2012 futures ended at 5671, at a premium of 43.25 points over spot closing. Nifty November futures saw contraction of 0.50 million (mn) units taking the total outstanding open interest (OI) to 13.40 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 0.25 at 90.25 compared with spot closing of 90.00. The number of contracts traded was 12,062.

Tata Motors November 2012 futures were trading at a premium of 1.70 at 259.8 compared with spot closing of 258.10. The number of contracts traded was 14,829.

Tata Steel November 2012 futures were at a discount of 1.70 point at 367.25 compared with spot closing of 365.55. The number of contracts traded was 10,233.

Reliance Industries November 2012 futures were at a premium of 2.85 point at 767.95 compared with spot closing of 765.10. The number of contracts traded was 10,331.

ICICI Bank November 2012 futures were at a premium of 6.2 point at 1037.2 compared with spot closing of 1,031.00. The number of contracts traded was 19,919.

Among Nifty calls, 5,800 SP from the November month expiry was the most active call with an addition of 0.03 million open interest.

Among Nifty puts, 5,500 SP from the November month expiry was the most active put with an addition of 0.43 million open interest.

The maximum OI outstanding for Calls was at 5800 SP (8.62 mn) and that for Puts was at 5500 SP (9.15 mn).

The respective Support and Resistance levels are: Resistance 5644.73 -- Pivot Point 5626.36 -- Support 5609.38.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.08 for November -month contract.

The top five scrips with highest PCR on OI were Welcorp 18.75, Abirlanuvo 2.00, M&M 1.95, Maruti 1.69 and HDFC Bank 1.50.

Among most active underlying, Jaiprakash Associates witnessed an addition of 1.54 million of Open Interest in the November month futures contract followed by Unitech which witnessed an addition of 0.53 million of Open Interest in the near month contract. Meanwhile, IFCI witnessed contraction of 5.16 million in the November month futures. Also, RCOM witnessed an addition of 1.09 million in Open Interest in the November month contract. Finally, Hindalco Industries witnessed contraction of 1.17 million of Open Interest in the near month futures contract.