Nifty bounce back in final hours to reach 19 months high

S&P CNX Nifty surged past its 19 months closing high on Thursday, supported by a last hour turn around in the markets after one of the outside supporting party of the government, Bahujan Samaj Party decided to vote for the government on the issue of FDI in multi brand retail. Its party chief Mayawati during a debate in upper house said that her party will vote in favour for FDI in multi-brand retail. The local market that has suffered sharp selling pressure on concern whether the government will be able to muster support in the Rajya Sabha, moved higher with the news.

The Global cues though remained supportive and the major US markets ended in green on some supportive economic data, while the Asian markets ended off 16-months high level on US President Barack Obama’s statement that a deal to avert the so-called fiscal cliff of year-end tax hikes and spending cuts was possible in 'about a week' if Republicans compromise on taxes. The European markets too made a jubilant start on hopes of US reaching a deal to avert "fiscal cliff" and as German factory orders surged almost four times than expected.

Back home markets regained their lost vigor only in last after the picture got clear that the government will be able to sail through in the Upper House too after the Bahujan Samaj Party chief openly announced the support of her party to the government. Traders went for last hour buying and helped the Nifty reach its 19 month closing high. On the sectoral front on NSE, except CNX IT which was down by 1.39%, rest all closed in green, CNX Realty up by 1.98%, CNX PSU Bank up by 1.54%, bank nifty up by 1.19%, CNX Finance up by 1.10%, CNX Media up by 1.01%, CNX Commodities up by 0.76%, CNX PSE up by 0.69% and CNX Metal up by 0.54%, were the top gainers. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined by 1.38% and reached 15.24.

The India VIX witnessed contraction of 8.30% at 15.24 as compared to its previous close of at 16.62 on Wednesday.

The 50-share S&P CNX Nifty gained 30.40 points or 0.52% to settle at 5,930.90.

Nifty December 2012 futures closed at 5970.65 on Thursday at a premium of 39.75 points over spot closing of 5,930.90, while Nifty January 2013 futures ended at 6003.05, at a premium of 72.15 points over spot closing. Nifty December futures saw an addition of 0.22 million (mn) units taking the total outstanding open interest (OI) to 20.66 mn units. The near month December 2012 derivatives contract will expire on December 27, 2012.

From the most active contracts, Unitech December 2012 futures were at a premium of 0.10 at 36.10 compared with spot closing of 36.00. The number of contracts traded was 14,100.

JP Associates December 2012 futures were at a discount of 1.25 at 103.55 compared with spot closing of 104.80. The number of contracts traded was 16,701.

Reliance Power December 2012 futures were at a premium of 0.65 point at 100.95 compared with spot closing of 100.30. The number of contracts traded was 17,655.

Tata Motors December 2012 futures were at a premium of 1.60 point at 282.85 compared with spot closing of 281.25. The number of contracts traded was 15,680.

DLF December 2012 futures were at a premium of 1.50 point at 227.80 compared with spot closing of 226.30. The number of contracts traded was 23,617.

Among Nifty calls, 6,000 SP from the December month expiry was the most active call with contraction of 0.25 million open interest.

Among Nifty puts, 5,500 SP from the  December month expiry was the most active put with  an addition  of 0.14 million open interest.

The maximum OI outstanding for Calls was at 6000 SP (7.84mn) and that for Puts was at 5500 SP (6.91 mn).

The respective Support and Resistance levels are: Resistance 5969.33 -- Pivot Point 5904.12 -- Support 5865.68.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.29 for December -month contract.

The top five scrips with highest PCR on OI were ABB 2.33, Axis Bank 1.10, PNB 1.09, Asian Paint 1.07, and  HDFC 1.03.

Among most active underlying, Unitech witnessed an addition of 7.22 million of Open Interest in the December month futures contract followed by IFCI which witnessed an addition of 1.58 million of Open Interest in the near month contract. Meanwhile, Jaiprakash Associates witnessed an addition of 1.33 million in the December month futures. Also, RCOM witnessed an addition of 1.57 million in Open Interest in the December month contract. Finally, Shree Renuka Sugars witnessed an addition of 0.36 million of Open Interest in the near month futures contract.