Nifty ends higher despite weak December IIP data

S&P CNX Nifty ended higher on Tuesday despite weak December IIP data indicating a sustained weakness in the economy. Value buying after days of correction and short covering helped the market close in the green. On the global front, most of the Asian markets remain closed for trade on account of Lunar New Year, while Japan's Nikkei soared on amid fresh yen weakness following recent comments from Japanese officials. Meanwhile, European shares were showcasing mixed trend, with downbeat outlooks from firms such as Dutch navigation devices and digital map company TomTom weighing on the sentiments.

Back home, Indian equity benchmark made a positive start and re-conquered its crucial 5,900 mark. In the morning session of the trade, market traded positively as investor kept themselves busy in piling up positions in beaten down fundamentally strong stocks. Traction was also supported by the rally in the PSU oil marketing companies, which came after the finance ministry’s announcement that Rs 25,000 crore additional cash subsidy for the fiscal will be given for selling diesel, domestic LPG and PDS kerosene at controlled prices. However, the market pared its early gains in the noon session and turned negative as investors’ sentiments got dampen after India's annual industrial output growth measured by index of industrial production (IIP), contracted by 0.6% at 179.3 for the month of December 2012, versus the expectations of 1 per cent growth and against contraction of 0.1% in the previous month. However, the losses remain short-lived and market turned positive as investors’ digesting slew of disappointing macro-economic reports, began to shop for fundamentally strong stocks available at lucrative prices. Market continued its firm trade in late afternoon session too and reached its intra-day high mark. Investors were seen piling up position in pharma, PSE, and energy stocks on the hopes that the recent IIP reading may put some more pressure on the Reserve Bank of India (RBI) to cut its policy rate by a further 25 basis points, in its next policy review on March 19.  Finally, Nifty ended the session near its intra-day high.

Meanwhile, sectoral indices on the NSE made a mixed closing. CNX PSE up by 1.39%, CNX Pharma up by 1.21%, CNX Energy up by 1.11%, CNX Auto up by 0.89% and CNX FMCG up by 0.32% remained the top gainers in the trade. While CNX Realty down 5.15%, CNX IT down 0.59%, CNX Media down 0.32% and CNX Metal down 0.18% remained the losers. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, down by 2.17% and reached 15.31. 

The India VIX witnessed contraction of 2.17% at 15.31 as compared to its previous close of at 15.65 on Monday.

The 50-share S&P CNX Nifty gained 24.65 points or 0.42% to settle at 5,922.50.

Nifty February 2013 futures closed at 5,941.40 on Tuesday at a premium of 18.90 points over spot closing of 5,922.50, while Nifty March 2013 futures ended at 5,970.50, at a premium of 48.00 points over spot closing. Nifty February futures saw an addition of 0.22 million (mn) units taking the total outstanding open interest (OI) to 13.34 mn units. The near month February 2013 derivatives contract will expire on February 28, 2013.

From the most active contracts, JP Associates February 2013 futures were trading flat compared with spot closing of 72.85. The number of contracts traded was 20,357.

Unitech February 2013 futures were at a premium of 0.25 points at 28.90 compared with spot closing of 28.65. The number of contracts traded was 27,463.

Reliance Communications February 2013 futures were at a premium of 0.25 points at 74.10 compared with spot closing of 73.85. The number of contracts traded was 8,325.

Tata Motors February 2013 futures were at a premium of 1.20 points at 299.25 compared with spot closing of 298.05. The number of contracts traded was 9,907.

DLF February 2013 futures were at a premium of 0.75 points at 268.75 compared with spot closing of 268.00. The number of contracts traded was 16,585.

Among Nifty calls, 6,100 SP from the February month expiry was the most active call with contraction of 0.02 million open interest.

Among Nifty puts, 5,900 SP from the February month expiry was the most active put with an addition of 0.36 million open interest.

The maximum OI outstanding for Calls was at 6100 SP (7.40 mn) and that for Puts was at 5,900 SP (7.23 mn).

The respective Support and Resistance levels are: Resistance 5937.95 -- Pivot Point 5912.2 -- Support 5896.75.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.07 for February -month contract.

The top five scrips with highest PCR on OI were Welcorp 1.90, TCS 1.71, Indusind bank 1.27, ITC 1.24 and Infosys 1.17.

Among most active underlying, NHPC witnessed an addition of 2.01 million of Open Interest in the February month futures contract followed by Unitech which witnessed contraction of 12.50 million of Open Interest in the near month contract. Meanwhile, Jaiprakash Associates witnessed of an addition of 0.80 million in the February month futures. Also, IFCI witnessed an addition of 0.40 million in Open Interest in the February month contract. Finally, RCOM witnessed an addition of 0.81 million of Open Interest in the near month futures contract.