Nifty witnesses exceptional recovery on strong global cues

After witnessing a downfall for four straight sessions, the local benchmark, Nifty witnessed an exceptional recovery on Tuesday and recaptured its crucial 4,950 level after hitting a triple digit rally on the back of strong global cues while, bargain hunting witnessed in beaten down stocks on the domestic front too aided the sentiments. However, benchmark witnessed a terrific run throughout the day’s trade and garnered gain of about three percent. Earlier, the Indian equity market made gap up start tracking supportive cues from global indices and started its northward journey recapturing its crucial 4,900 mark led by fresh spell of buying by funds and retail investors in recently beaten-down stocks. The benchmark continued its jubilant run in late morning trade as key heavyweight Larsen & Toubro, engineering and construction major and private sector aluminium major Hindalco Industries advanced on bargain hunting after sliding to 52-week low on September 26, 2011. The strong opening in European counterparts too aided the sentiments and the index extended its bull run in noon trade. Afterwards, the benchmark continued its bull run till end as global strength remained strong. In addition, covering-up of short positions ahead of monthly expiry in the derivatives segment on Thursday also helped stocks to move higher. Finally, Nifty snapped the day’s trade near its intraday high with a gain of over 130 points led by strong gains in heavyweights like Reliance Industries, Tata Motors, Tata power and DLF.

On the global front, the US markets made a good bounce back in final hours of trade to close at the high points of the day overnight while, all the Asian counterparts bounced back and ended the terrific day of trade with a decent gain after a pledge by European officials to resolve the region’s debt problems helped soothe market sentiment. All the European counterparts were trading on a positive note where major indices like CAC, DAX and FTSE were trading with a gain of 2-4 percent at this point of time. Back home, broad-based buying supported all sectoral indices on the NSE to settle in the positive territory with CNX Realty surging the most and ending with a gain of 5.16% followed by CNX IT up 3.56% and CNX Energy up 3.40%. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 9.65% and reached 32.01, while S&P Nifty moved higher by 135.85 points or 2.81% to close at 4,971.25.

The India VIX witnessed loss of 3.42% at 32.01 as compared to its previous close of 35.43 on Monday.  

The 50-share S&P CNX Nifty gained 135.85 points or 2.81% and settled at 4,971.25.

Nifty September 2011 futures closed at 4,983.00 at a premium of 11.75 points over spot closing of 4,971.25, while Nifty October 2011 futures were at 4,999.40 at a premium of 28.15 points over spot closing. The near month September 2011 derivatives contract expires on Thursday, September 29, 2011. Nifty September futures saw addition of 8.03% or 1.73 million (mn) units, taking the total outstanding open interest (OI) to 23.34 mn units.

From the most active contract by contract value, SBI’s September 2011 futures were at a premium of 5.00 point at 2005.00 compared with spot closing of 2000.00. The number of contracts traded was 36,770.

RIL September 2011 futures were at a discount of 0.60 point at 798.05 compared with spot closing of 798.65. The number of contracts traded was 31,570.

ICICI Bank September 2011 futures were at a premium of 3.45 point at 889.60 compared with spot closing of 886.15. The number of contracts traded was 25,231.

Tata Steel September 2011 futures were at a premium of 0.35 point at 439.70 compared with spot closing of 439.35. The number of contracts traded was 22,307.

SBI’s October 2011 futures were at a premium of 5.30 point at 2005.30 compared with spot closing of 2000.00. The number of contracts traded was 19,199.

Among Nifty calls, 5000 SP from the September month expiry was the most active call with addition of 0.54 million or 8.02%.

Among Nifty puts, 4900 SP from the September month expiry was the most active put with addition of 2.66 million or 58.03%.

The maximum Call OI outstanding for Calls was at 5000 SP (7.33 mn) and that for Puts was at 4900 SP (7.24 mn).

The respective Support and Resistance levels are: Resistance 5001.08-- Pivot Point 4953.11-- Support 4923.28.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.24 for September -month contract.

The top five scrips with highest PCR on OI were United Phosphorus 6.00, United Spirits 4.00, Patni 4.00, Kotak Bank 2.63and Siemens 1.58.

Among most active underlying, SBI witnessed a contraction of 9.63% of Open Interest (OI) in the September month futures contract followed by RIL witnessed an addition of 12.25% of Open Interest (OI) in the near month contract. Meanwhile ICICI Bank witnessed a addition of 5.06% of OI in the September month futures. Also, Tata Steel witnessed a contraction of 2.03% of Open Interest (OI) in the September month contract followed by JSW Steel witnessed an addition of 2.86% of Open Interest (OI) in the September month contract.