Nifty ends higher amid rate cut hopes

S&P CNX Nifty ended higher on Friday on the back of buying in rate sensitive sectors ahead of Reserve Bank of India's (RBI) third quarter monetary policy review on January 29. On global front, Asian pacific shares ended mixed on Friday, despite expectations that Japan will pursue bold policies to beat deflation and stimulate growth. Additionally, European stock markets were mostly higher in early trade on Friday, with banks on the rise, while investors awaited news from the European Central Bank about long-term loan repayments from banks.

Back home, Indian equity benchmark made a decent start and picked up pace as the sentiment got a boost after Urban Development Minister Kamal Nath emphasized that India has seen a large number of reforms in recent years and the country expects to see about $1 trillion investments in infrastructure in the next five years to boost economic growth. In the first half of the trade, market continued its positive trade on account of buying in rate sensitive stocks amid rate cut hopes. The market surged above 6,000 level on hopes that the Reserve Bank will reward the government next week for its efforts to reform the economy and bring its finances under control by announcing its first cut in interest rates in nine months. Market extended its early gains in the second half too and crossed its crucial 6,050 level as sentiments got support after Maruti Suzuki reported a better-than-expected 144% year-on-year (y-o-y) growth in net profit of Rs 501 crore for the third quarter ended December 31, 2012. Finally, Nifty ended the session with a gain of massive 55 points.  
 
Meanwhile, all the sectoral indices on the NSE made a positive closing. CNX Realty up by 4.87%, CNX PSU Bank up by 2.80%, CNX Auto up by 2.16%, CNX Media up by 1.61% and CNX Pharma up by 1.57% remained the top gainers in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, up by 2.14% and reached 14.77. 

The India VIX witnessed an addition of 2.14% at 14.77 as compared to its previous close of at 14.46 on Thursday.

The 50-share S&P CNX Nifty gained 55.30 points or 0.92% to settle at 6,074.65.

Nifty January 2013 futures closed at 6073.70 on Friday at a discount of 0.95 points over spot closing of 6,074.65, while Nifty February 2013 futures ended at 6111.30, at a premium of 36.65 points over spot closing. Nifty January futures saw contraction of 0.72 million (mn) units taking the total outstanding open interest (OI) to 11.56 mn units. The near month January 2013 derivatives contract will expire on January 31, 2013.

From the most active contracts, Reliance Communications January 2013 futures were at a premium of 0.25 points at 86.10 compared with spot closing of 85.85. The number of contracts traded was 15,586.

JP Associates January 2013 futures were at a discount of 0.05 points at 86.90 compared with spot closing of 86.95. The number of contracts traded was 12,005.

HDIL January 2013 futures were at a discount of 0.80 points at 81.65 compared with spot closing of 82.45. The number of contracts traded was 11,504.

Tata Motors January 2013 futures were at a premium of 0.05 points at 300.50 compared with spot closing of 300.45. The number of contracts traded was 15,910.

DLF January 2013 futures were at a premium of 1.15 point at 260.55 compared with spot closing of 259.40. The number of contracts traded was 23,868. 

Among Nifty calls, 6,200 SP from the January month expiry was the most active call with contraction of 0.20 million open interest.

Among Nifty puts, 6,000 SP from the January month expiry was the most active put with an addition of 1.77 million open interest.

The maximum OI outstanding for Calls was at 6200 SP (9.50 mn) and that for Puts was at 6,000 SP (8.56mn).

The respective Support and Resistance levels are: Resistance 6098.65 -- Pivot Point 6056.55 -- Support 6032.55.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.43 for January-month contract.

The top five scrips with highest PCR on OI were Welcorp 3.00, Infosys 2.17, Mcleodruss 2.00, SR Transfin 1.57 and Bharti Airtel 1.53.

Among most active underlying, Unitech witnessed contraction of 4.43 million of Open Interest in the January month futures contract followed by Suzlon which witnessed an addition of 4.53 million of Open Interest in the near month contract. Meanwhile, JP Associates witnessed of contraction of 8.92 million in the January month futures. Also, IFCI witnessed contraction of 2.59 million in Open Interest in the January month contract. Finally, Rcom witnessed contraction of 1.44 million of Open Interest in the near month futures contract.