Nifty recovers in second half amid firm European counterparts

The domestic index S&P CNX Nifty ended the volatile day of trade with a cut of over half a percent. However, market made an exceptional recovery in second half as European counterparts made a good opening.  Earlier, the Indian equity market made a positive start, but immediately turned into red terrain tracking weakness in Asian counterparts as all the peers in the region were treading on a subdued note. Market extended the losses as trade proceeded and breached its crucial 4,800 mark as cues across the globe remained dismal. Moreover, metal and mining shares too dampened the sentiments as shares like Hindalco, Sterlite Industries, Sesa Goa and Hindustan Zinc snapped session with a cut of 3-6 percent. In the late morning trade, the index touched its intraday low near its crucial 4,750 mark. But, market found good support at that level and started pairing its earlier losses as short covering witnessed in blue-chip stocks, moreover, firm opening in European counterparts too supported the up-move and market recaptured its crucial 4,800 mark. Afterwards, the index continued to pare its losses and touched green land in final hour of trade. Meanwhile, fall in Indian rupee against dollar pushed up IT stocks because most IT firms earn a large part of their revenues in dollars. Stocks like Infosys, TCS and Wipro all edged higher in the trade. In addition, PG Electroplast, the new listing today, got tremendous response from the traders and the scrip gained over 95 percent in the trade. But, market lost some ground in last half an hour of trade and finally, Nifty snapped the day’s trade with a cut of over half a percentage point.

On the global front, the US markets managed a close of modest gains on Friday but the mood remained cautious amid the European debt concerns while, all the Asian equity indices ended the day’s trade in the negative terrain as investors remained concerned over the euro-zone as leaders of the debt-troubled region struggled to find a plan to solve the crisis. However, most of the European counterparts were trading in the positive terrain where major indices CAC, and DAX trading with a gain of over two percent at this point of time. Back home, most of the sectoral indices on the NSE settled in the red, CNX Energy remained the major loser, down 1.59% followed by CNX FMCG down 1.52% and CNX PSE down by 1.25% while CNX IT and CNX PSU Bank surged 0.37% and 0.36% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, surged 0.76% and reached 35.43, while S&P Nifty closed at 4,835.40 losing 32.35 points or 0.66%.

The India VIX witnessed gain of 0.76% at 35.43 on Monday as compared to its previous close of 35.16 on Friday.  

The 50-share S&P CNX Nifty lost 32.35 points or 0.66% and settled at 4,835.40.

Nifty September 2011 futures closed at 4,840.10 at a premium of 4.70 points over spot closing of 4,835.40, while Nifty October 2011 futures were at 4,851.00 at a premium of 15.60 points over spot closing. The near month September 2011 derivatives contract expires on Thursday, September 29, 2011. Nifty September futures saw addition of 12.08% or 2.86 million (mn) units, taking the total outstanding open interest (OI) to 26.56 mn units.

From the most active contract by contract value, SBI’s September 2011 futures were at a premium of 6.90 point at 1957.15 compared with spot closing of 1950.25. The number of contracts traded was 43,103.

ICICI Bank September 2011 futures were at a discount of 0.45 point at 853.05 compared with spot closing of 853.50. The number of contracts traded was 36,973.

L&T September 2011 futures were at a premium of 5.20 point at 1429.00 compared with spot closing of 1423.80. The number of contracts traded was 20,866.

Axis Bank September 2011 futures were at a premium of 1.80 point at 1055.80 compared with spot closing of 1054.00. The number of contracts traded was 22,235.

RIL September 2011 futures were at a premium of 1.60 point at 762.05 compared with spot closing of 760.45. The number of contracts traded was 30,902.

Among Nifty calls, 4900 SP from the September month expiry was the most active call with addition of 0.83 million or 17.39%.

Among Nifty puts, 4800 SP from the September month expiry was the most active put with addition of 0.28 million or 3.66%.

The maximum Call OI outstanding for Calls was at 4900 SP (5.64 mn) and that for Puts was at 4800 SP (8.16 mn).

The respective Support and Resistance levels are: Resistance 4890.51 -- Pivot Point 4824.68 -- Support 4769.56.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.14 for September -month contract.

The top five scrips with highest PCR on OI were United Phosphorus 6.00, McDowells 4.00, Patni 4.00, Kotak Bank 2.45 and Siemens 2.13.

Among most active underlying, SBI witnessed a contraction of 1.73% of Open Interest (OI) in the September month futures contract followed by RIL witnessed an addition of 3.08% of Open Interest (OI) in the near month contract. Meanwhile ICICI Bank witnessed a contraction of 3.46% of OI in the September month futures. Also, Tata Steel witnessed a contraction of 3.50% of Open Interest (OI) in the September month contract followed by L&T witnessed a contraction of 10.54% of Open Interest (OI) in the September month contract.