Final hour recovery helps Nifty to re-conquer 5,900 mark

S&P CNX Nifty snapped the session on a quite note as investors remained on sidelines ahead of October’s index of industrial production (IIP) data and headline inflation data for November, scheduled to be released later this week on December 12 and 14, respectively, as these will influence the RBI’s stance on policy rates. The global cues remain mixed as European counters traded in the red in early deals on concerns that a leadership change in Italy could stall efforts to curb the debt crisis in Euro-zone. Reports stated that Italian Prime Minister Mario Monti said he has lost support and will resign. However, most of the Asian equity indices went home with gains buoyed by the Chinese optimism after data of industrial production as well as retail sales from the country suggested recovery in the global economy.

Back home, the benchmark, after making a flat-to-negative start of the new week, extended its downfall and breached its crucial 5,900 mark as sentiments got dampened after shares of sugar manufacturing companies declined on reports that Uttar Pradesh (UP) has increased State Advised Price (SAP) for sugarcane procurement by more than 15% to Rs 275-290 a quintal for 2012-13 compared to last year. SAP is the price below which mills cannot buy cane from farmers. Afterwards, market traded in tight band due to lack of global as well as domestic cues. In the mid noon trade, the index extended its southward journey and touched its intraday low as Rajya Sabha was adjourned due to uproar following news reports on Walmart lobbying for its entry into India. The sentiments also got dampened after auto sector lost its shine on SIAM’s report that domestic car sales fell by 8.25 per cent to 1,58,257 units in November this year compared to 1,72,493 units in the same month last year. But, market made a decent recovery in the late trade, re-conquering 5,900 bastion, supported by rally in public sector banks on hopes that legislation on banking sector reforms would be passed during the current session of parliament. Confidence of the market participants also remained higher after realty stocks extended recent gains as investors bet that retail real estate will get a boost from the entry of foreign supermarket chains in the country. Also, associate banks of State Bank of India gained by 15-20 per cent on fresh buying accompanied by heavy rise in volume. Finally, Nifty ended the session marginally in the green tad above its crucial 5,900 level.

Meanwhile, most of the sectoral indices on the NSE settled in green, CNX PSU Bank remained the major gainer, up 1.72% followed by CNX Pharma up 1.15% and CNX Realty up by 1.14% while CNX Media and CNX Energy declined 0.92% and 0.73% remained the top losers in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 3.01% and reached 14.51.

The India VIX witnessed contraction of 3.01% at 14.51 as compared to its previous close of at 14.96 on Friday.

The 50-share S&P CNX Nifty gained 1.50 points or 0.03% to settle at 5,908.90.

Nifty December 2012 futures closed at 5942.45 on Monday at a premium of 33.55 points over spot closing of 5,908.90, while Nifty January 2013 futures ended at 5976.10, at a premium of 67.20 points over spot closing. Nifty December futures saw contraction of 0.44 million (mn) units taking the total outstanding open interest (OI) to 20.14 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 0.25 at 36.25 compared with spot closing of 36.00. The number of contracts traded was 9,478.

Reliance Communications December 2012 futures were at a premium of 0.50 at 76.60 compared with spot closing of 76.10. The number of contracts traded was 9,305.

Tata Motors December 2012 futures were at a premium of 2.10 point at 282.05 compared with spot closing of 279.95. The number of contracts traded was 11,903.

Karnataka Bank December 2012 futures were at a premium of 1.50 point at 197.15 compared with spot closing of 195.65. The number of contracts traded was 18,580.

DLF December 2012 futures were at a premium of 1.60 point at 223.20 compared with spot closing of 221.60. The number of contracts traded was 13,975.

Among Nifty calls, 6,000 SP from the December month expiry was the most active call with an addition of 0.62 million open interest.

Among Nifty puts, 5,500 SP from the  December month expiry was the most active put with  an addition  of 0.28 million open interest.

The maximum OI outstanding for Calls was at 6000 SP (9.24mn) and that for Puts was at 5500 SP (7.40 mn).

The respective Support and Resistance levels are: Resistance 5896.11 -- Pivot Point 5908.03 -- Support 5900.02.

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 Welcorp 10.00, HDFC 1.41, PNB 1.40, Bank Baroda 1.06 and Asian Paint 1.05.

Among most active underlying, Unitech witnessed an addition of 4.71 million of Open Interest in the December month futures contract followed by IFCI which witnessed an addition of 3.12million of Open Interest in the near month contract. Meanwhile, Jaiprakash Associates witnessed contraction of 0.64 million in the December month futures. Also, Reliance Communications witnessed an addition of 2.99 million in Open Interest in the December month contract. Finally, Shree Renuka Sugars witnessed an addition of 2.63 million of Open Interest in the near month futures contract.